The New Zealand dollar's fall following yesterday's rate announcement by the Reserve Bank was reversed with interest overnight as offshore demand boosted the currency.By 8am today the NZ dollar was buying US72.33c, having peaked a few hours earlier near U
The New Zealand dollar's fall following yesterday's rate announcement by the Reserve Bank was reversed with interest overnight as offshore demand boosted the currency.
By 8am today the NZ dollar was buying US72.33c, having peaked a few hours earlier near US72.45c, close to the three-month high reached overnight Monday.
At 5pm yesterday the kiwi had been down to US71.66c after speculators pulled out of the New Zealand currency because of the language used by the Reserve Bank in its announcement that the official cash rate was being left unchanged at 2.5 percent.
In its morning briefing notes today, ANZ said that after giving up ground yesterday, the NZ dollar was driven higher overnight as offshore demand came to the fore.
US dollar fortunes waned slightly, while commodity currencies were all higher as sovereign fears subsided and European and US equities rose.
But while the euro rose broadly overnight, trepidation towards the European currency remained, ANZ said.
"The NZD came back in favour, and indeed could even benefit from ongoing eurozone turmoil. Asset managers, including central banks, who are diversifying away from USD will be having second thoughts about reallocating into euros. Gold and commodity currencies seem to be the next best alternative."
While the euro gained on the greenback and yen, it was no match for the resurgent kiwi which rose to 0.5461 euro at the local open from 0.5421 at 5pm. Earlier today the NZ dollar equalled yesterday's 26-month high around 0.5470 euro.
The kiwi also rose from 67.27 yen at the local close to 68.05 yen at 8am, and was up to A77.97c against the Australian dollar from A77.48c. The trade weighted index was 67.50 at 8am from 66.99 at 5pm.
