The New Zealand dollar surged overnight, reaching multi-month highs against the major currencies.The kiwi peaked early today at a three-month high against the greenback around US72.55c. By 8am it had slipped back to US72.25c, still well ahead of the US71.
The New Zealand dollar surged overnight, reaching multi-month highs against the major currencies.
The kiwi peaked early today at a three-month high against the greenback around US72.55c. By 8am it had slipped back to US72.25c, still well ahead of the US71.84c at 5pm yesterday.
BNZ strategist Mike Jones said factors contribution to the NZ dollar's strength overnight included speculation that Fonterra would raise the current season's dairy payout this week.
Upbeat comments from Fonterra that "significantly higher" dairy prices were likely during the next decade, compared to the 10 years to 2007, added to the positive mood, Mr Jones said.
Secondly, speculative and leveraged-type accounts had become increasingly wary of holding short positions in the NZ dollar against the aussie going into the Reserve Bank's interest rate announcement on Thursday.
Market chatter also suggested the NZ dollar had been in hot demand from so-called Toshin funds -- Japanese investment trusts that invest in offshore assets -- during the past 24 hours.
The NZ dollar topped 0.5435 euros, its highest level against the European currency in 26 months. It dropped to 0.5407 by the local open, up from 0.5374 by 5pm.
During the night, confusion surrounding the timing and amount of emergency aid for Greece pushed investors into selling the euro as markets worried whether the euro zone country can avert a debt default.
The kiwi got close to 68.30 yen for the first time in more than three months, rising from 67.66 yen at the local close and easing to 67.95 yen at 8am.
Against the Australian dollar, the kiwi reached a two-month high around A78.05c, easing only slight by 8am after having climbed from A77.44c at the local close. The trade weighted index rose to 67.23 at 8am from 66.89 at 5pm.
