The New Zealand dollar raced up as higher-yielding currencies benefited from US authorities' proposed US$700 billion ($1.06 billion) bailout of the financial system.
By 8am the NZ dollar was at a three-week high against the greenback, buying around US69c, from US67.35c at 5pm on Friday.
Despite the initial
optimism over the rescue plan, traders said the currency market remained sceptical.
"There is a lot of scepticism in the market, and that seems to be evident by the way the euro has rebounded, the pound, Canadian and Aussie dollars too," said Jon Gencher, director of FX sales at BMO Capital Markets in Toronto.
"The market is waiting to see how this whole thing is going to pan out."
In this country, ANZ bank said today that risk sentiment had improved, sending the NZ and Australian dollars higher.
The kiwi finished last week with a one-way move against a backdrop of a poorly performing US dollar, ANZ said.
The NZ dollar also rose against the Japanese currency, buying 73.76 yen at 8am from 72.06 at 5pm on Friday.
The kiwi was little moved against the euro, slightly higher at 0.4761 from 0.4751, while it slipped against the Australian dollar to A82.41c from A83.26c. The trade weighted index was 64.83 at 8am from 64.15 on Friday evening.
Currency rates:
NZ dlr/US dlr US68.69c US67.35c
NZ dlr/Aust dlr A82.70c A83.26c
NZ dlr/euro 0.4739 0.4751
NZ dlr/yen 73.20 72.06
NZ dlr/stg 37.53p 37.38p
NZ TWI 64.60 64.15
Australian dollar US83.02c US80.92c
Euro/US dollar 1.4490 1.4168
US dollar/yen 106.60 107.04
- NZPA
