The New Zealand dollar spent today trading around a one-week high against a backdrop of firm equity markets and ahead of the Reserve Bank of New Zealand (RBNZ) official cash rate (OCR) decision on Thursday.
Around 5pm today the NZ dollar was at US72.74c, up from US72.61c at 8am and
US72.42c at 5pm Friday.
"A heavyweight data week looms. Most important will be the RBNZ OCR review, when a 25 basis point hike to 3 per cent is widely expected," Westpac said.
Investors will be looking for clues as to the pace and duration of the tightening cycle in comments on the decision.
The NZ dollar was at A81.28c at 5pm from A81.16c at 5pm on Friday.
Westpac said the cross has been in an uptrend since April but the odds of a temporary pullback to around A80c have risen.
BNZ markets strategist Mike Jones said investors' fears about a double dip recession in the global economy had been soothed last week by better corporate earnings in the United States and stronger than expected economic news from the euro zone and Britain.
The broad CRB index of commodity prices rose 1.7 per cent last week, while the MSCI world equity index jumped 2.6 per cent.
Against a backdrop of rising equity markets and improved risk appetite, investors had shunned safe haven currencies such as the greenback and yen last week in favour of growth sensitive currencies such as the NZ and Australian dollars, Mr Jones said.
By today's local close, the NZ dollar has risen to 63.70 yen from 62.93 yen at 5pm on Friday.
It peaked at 0.5676 euros during the weekend but was 0.5628 by 5pm from 0.5616 on Friday.
The trade weighted index was at 68.13 from 67.90 at Friday's local close.
- NZPA
