NZ dollar surges as risk appetite buoyed

The New Zealand dollar surged higher overnight as a global stocks rally buoyed risk appetite.

Investors were also reassured after China said Europe remained a key investment market for its foreign-exchange reserves, and that a Financial Times report that Beijing was concerned about its euro zone bond holdings was groundless.

The New Zealand dollar pushed to its highest level in a week against the greenback, euro and yen.

Around 8am the kiwi was buying US68.37c from US66.84c at 5pm yesterday. The NZ dollar was also up to 62.17 yen at the local open from 60.27, and rose to 0.5531 euro from 0.5450 at the local close.

The trade weighted index rose to 66.14 at 8am from 65.12 at 5pm.

Despite slipping against the kiwi, the euro was broadly stronger after earlier having been driven to a near four-year low against the greenback by the now discounted Financial Times report.

Meanwhile, the yen came under broad pressure as investors put on riskier bets funded by cheap borrowing in the Japanese currency.

In its morning briefing notes, ANZ bank said the NZ dollar led the way higher overnight after the Chinese authorities denied reports they were reviewing their euro holdings.

The kiwi did slip against the Australian dollar, to be at A80.37c at 8am from A80.50c at 5pm.

ANZ said moves very close to the A79c region had been thwarted on reasonable demand overnight. More of the same was likely for the cross today ahead of a decision on Australian interest rates next week.

- NZPA