UPDATED: NZ dollar approaches post-float high

The New Zealand dollar has continued its climb against the greenback, approaching the post-float high of 82.13USc.

At about 2:40pm the New Zealand dollar was buying 81.53USc, up from the overnight high of 81.24USc.

It has come back slightly from the day’s high of 81.69USc reached at about 2pm.

The Kiwi is also up against the Australian dollar, reaching 76.56Ac today, its highest level since February.

Meanwhile, the New Zealand dollar is approaching 50p against the pound, sitting at a high of 49.52p.

And it is trading above the 57c mark against the euro, dropping back slightly to 57.14€c from today’s high of 57.38€c, the highest it’s been against the euro since January. 

The New Zealand dollar has continued to soar against the greenback, rising to a three-year high overnight after unconfirmed reports of China planning to buy New Zealand assets.

The dollar rose from about 79.60USc to hit on overnight high of 81.24USc, the highest level since 2008 before the financial crisis hit.

It also rose to a four-month high against the Euro to be near peak levels at 57.39€c at 8am, up from 56.98€c.

Bancorp Treasury said in a commentary, “This is clearly a New Zealand dollar story, with the New Zealand dollar gaining against all currencies.”

It attributed this rise to reports that “suggest that the China Investment Corporation has set aside 1.5% of its massive foreign exchange reserves to be diversified away from the USD, and into New Zealand.

“Their unconfirmed investment would represent about $6 billion of purchases of domestic assets, including government bonds, companies and potentially even dairy farms.

“The reports come after strong demand at the recent government bond tenders was linked back to Chinese investment.”

Bancorp also pointed to the weak US economy as contributing to the New Zealand dollar’s rise.

“The recent trend of weak US data continued overnight with the March quarter growth being confirmed at just a 1.8% annualised rate.

“Most had expected the initial GDP reading to be revised upwards, so the confirmation of the initial growth rate is further evidence that the US economic recovery is struggling.”

BNZ chief economist Tony Alexander, writing from overseas, said, “what I have discovered in London is that by and large analysts are waiting for Kiwi dollar pullbacks simply to buy the NZD.

“Hence the currency – without our monetary policy tightening cycle even starting yet – has substantial upside left.”

This suggests the New Zealand dollar could soon rise above its post-float high of 82.13USc.

The NZ dollar peaked at a 15-week high against the Aussie at about 76.50Ac, easing to 76.28Ac at 8am, while being little changed at 66 yen.

The trade weighted index was up to 70.38 at 8am from 70.12 at 5pm.