The New Zealand dollar moved firmly above US72c early today after minutes of the last Federal Reserve meeting showed policy makers were concerned economic recovery in the United States may be slowing.The Federal Open Market Committee minutes weighed on th
The New Zealand dollar moved firmly above US72c early today after minutes of the last Federal Reserve meeting showed policy makers were concerned economic recovery in the United States may be slowing.
The Federal Open Market Committee minutes weighed on the greenback, which had also fallen earlier after data showed US retail sales declined for a second straight month.
Traders cited a growing demand for higher-yielding assets and growth-related currencies, with the NZ and Australian dollars rising against the greenback while US stocks recovered earlier losses.
"If growth is slowing, yields are likely to fall, so people want to lock in higher yields now," said Marc Chandler, senior currency strategist at Brown Brothers Harriman in New York.
The NZ dollar surged from around US71.60c to a two-month high US72.55c over a 2-1/2-hour period before 3am and remained above US72c after that to be at US72.30c at 8am.
The kiwi also reached a fortnight high 0.568 euro early today and was only slightly lower at the local open, having climbed from 0.5636 euro at 5pm yesterday.
Against the Australian dollar, the kiwi reached a one-week high just below A82c at 7am, slipping to A81.84c an hour later, having climbed from A81.30c at 5pm yesterday.
ANZ said support was maintained for the NZ dollar on the cross against the aussie, despite poor economic data in this country and a better than expected budget revision in Australia.
"In reality most are expecting an earlier than previously thought Australian election (August versus October) and this uncertainty is enough to see further topside tests for this cross."
The NZ dollar pushed to a three-week high near 64.30 yen early today, but by 8am was down to 63.84, little changed from the local close level. The trade weighted index rose to 68.30 at 8am from 67.86 at 5pm.
