Kiwi dollar rises after bank moves

The New Zealand dollar was heading for a 5.4 per cent weekly gain after central banks around the world acted to free up liquidity for European lenders, stoking optimism that policy makers will come up with a concrete plan to deal with Europe's debt crisis.

The kiwi rose to US77.97c at 5pm from US77.85c at 8am and up from US77.83c on Thursday - about 4c higher than the close of last week.

The market has been toiling through the banks' joint agreement to cut interest rates on dollar liquidity swap lines this week. The deal bolstered investor confidence but isn't expected to address the threat of indebtedness. That leaves investors waiting until the December 9 European Union leaders' summit, where it's expected a plan to deal with the debt problems will be unveiled.

The prospect of an improving labour market in the US helped support investor sentiment and underpinned the consolidation in so-called risk sensitive assets such as the kiwi.

The kiwi crept up to €57.94c from €57.86c on Thursday and gained to 49.72p from 49.59p. It climbed to A76.37c cents from A76.13c and advanced to 60.68 from 60.46. The trade weighted index rose to 68.95 from 68.81 on Thursday.

- BusinessDesk

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