The prospect of interest rate rises in New Zealand and the US injected a note of caution in the New Zealand dollar, which hit a two-year high against the euro and a three-month high against the US dollar overnight.By 5pm, the kiwi was at 72.08USc from 71.
The prospect of interest rate rises in New Zealand and the US injected a note of caution in the New Zealand dollar, which hit a two-year high against the euro and a three-month high against the US dollar overnight.
By 5pm, the kiwi was at 72.08USc from 71.84USc late yesterday afternoon. Rumours overnight ahead of a hike in Fonterra's forecast milk price payment to farmers helped push the kiwi to a peak of 72.55USc.
Today, Fonterra announced an increase in the forecast milk price payment to farmers of 40c to $6.10 per kg of milksolids, estimated as adding $500 million, or 0.3% of gross domestic product, to the economy.
"I think if euro hadn't been sold off, the kiwi probably would have gone up to test the overnight highs, but I don't think it would have got too much traction beyond that," HSBC chief forex manager Daniel Brdanovic said.
The kiwi's been gaining ground against the weakening euro for the past year, and hit a two-year high overnight of €0.5437.
By 5pm, the kiwi was at €0.5388 from €0.5347 late yesterday.
The kiwi was little changed at ¥67.68, a touch firmer against sterling at 46.64p, and higher against the Australian dollar at 77.85Ac from 77.44Ac yesterday afternoon.
"The markets are now focusing on possible improvements in the New Zealand economy, which has been on the periphery for a while as the market focused on the booming Australian economy," Mr Brdanovic said.
The trade weighted index firmed to 67.03 from 66.89.
