The New Zealand dollar spiked to a six-week high against the greenback around US71.60c, after the United States Federal Reserve kept interest rates steady at near zero, as expected, and reiterated its pledge to keep rates low for an extended period.But so
The New Zealand dollar spiked to a six-week high against the greenback around US71.60c, after the United States Federal Reserve kept interest rates steady at near zero, as expected, and reiterated its pledge to keep rates low for an extended period.
But soon after the surge, about 6.30am today, the kiwi fell back to be at US71.32c around 8am. That was still well up on the US70.39c at 5pm yesterday, with the greenback hurt by disappointing housing data, as well as the downbeat Fed statement.
The kiwi also hit a two-week high against the Australian dollar around A81.80c, with the New Zealand currency supported against the aussie by news of a challenge to the leadership of Australian Prime Minister Kevin Rudd by his deputy Julia Gillard. By 8am the kiwi was at A81.72c, up from A80.79c at 5pm yesterday.
BNZ strategist Mike Jones said yesterday's New Zealand balance of payments figures showing the annual deficit had shrunk to 2.4 percent of GDP was clearly better than expected.
At a time when the strength of economic data globally had started to falter, yesterday's solid set of current account figures served to keep the NZ dollar well supported, Mr Jones said.
Today's first quarter GDP figures, due out at 10.45am, loomed as a key test for the NZ dollar.
Against the European currency, the NZ dollar pushed to a three-year high near 0.5820 euro, as the euro struggled on concern about the euro zone banking system and the potential for economic stress in the area.
News that borrowing by Portuguese banks from the European Central Bank doubled in May to a record 35.8 billion euros ($NZ61.7b) highlighted bank reliance on ECB funds. At 8am the NZ dollar was worth 0.5794 euro from 0.5740 at 5pm.
The NZ dollar was at 64.11 yen at 8am from 63.70 at 5pm, while the trade weighted index rose to 68.47 from 67.80.
