The New Zealand dollar pushed to a five-week peak above 73USc today as it continued to be swept along by a surge in global risk appetite but it finished off its best levels.The NZ dollar was trading at 72.94USc at 5pm, down from 73.17USc at 8am, and up fr
The New Zealand dollar pushed to a five-week peak above 73USc today as it continued to be swept along by a surge in global risk appetite but it finished off its best levels.
The NZ dollar was trading at 72.94USc at 5pm, down from 73.17USc at 8am, and up from 72.46USc at 5pm on Friday. It has risen 5% from the August low around 69.45USc, Reuters reported.
Westpac said local factors have been largely negative, citing the South Canterbury Finance collapse, the Canterbury earthquake and weak economic data.
Also, if the Reserve Bank holds the official cash rate at 3% on Thursday, as expected, "yield support" for the currency will be removed. But this will all count for little as global risk appetite is expected to remain elevated this week, Westpac said.
US equities firmed on Friday and sharemarkets around Asia were also firm today.
Imre Speizer, senior currency strategist at Westpac said the overall impression was US double-dip concerns had receded, although a strong US wholesale inventory report may have added fuel to the rally at the New York open.
He said from a technical point of view the break above 72.25USc last week signalled a move to the 73.60-74.00USc area. If 74.00USc is broken this week, the next target would be 76.30USc, but the probability of this scenario is low.
Federated Farmers today called on the RBNZ to hold rates unchanged at its monetary policy statement on Thursday, citing the higher currency as a reason.
"Even before the unknown economic impact of Canterbury's 7.1 magnitude earthquake, we faced an appreciating kiwi dollar," said Lachlan McKenzie, Federated Farmers' acting economics spokesperson.
ANZ National Bank economist Mark Smith said no change was expected to the OCR.
"However, expect the tone of statement to be unusually subdued in light of the situation in Christchurch and this may see another reversal for the NZ dollar from recent highs," he said.
The Australian dollar held near four-month highs.
The NZ dollar was at 78.40Ac at 5pm from 78.72Ac at 8am, and 78.58Ac at 5pm Friday. It was at ¥61.36 from ¥60.86 and €0.5699 from €0.5714.
The trade weighted index rose to 67.59 at 5pm from 67.41 on Friday.
