The kiwi dollar rose to 63.39 euro cents overnight. Photo / File
The kiwi dollar rose to 63.39 euro cents overnight. Photo / File
The New Zealand dollar gained against the greenback and reached a five-and-a-half year high on a trade-weighted basis as improving US employment figures underpinned a rally on Wall Street and stoked investors' appetite for higher-yielding assets.
The kiwi was unchanged at 84.53 US cents at 8am in Wellington from theclose of trading on Friday in New York, and up from 84.10 cents at New Zealand's close last week. The trade-weighted index was little changed at 76.17 from 76.13 at the close of New York trading, and up from 75.64 in Wellington last week.
Stocks on Wall Street gained with the Standard & Poor's 500 and Dow Jones Industrial Average both up 1 per cent after government figures showed the US added 157,000 jobs in January and revised up earlier months.
The kiwi has been rallying on the relative strength of New Zealand's economy, which is expected to get a boost from the Canterbury rebuild this year, and on the stance of Reserve Bank governor Graeme Wheeler, who doesn't seem keen on cutting interest rates.
"Fundamentals and the central bank are going your way and offshore risk appetite is going your way as well," said Imre Speizer, market strategist at Westpac Banking in Auckland. The kiwi "still looks like it's going to press the record high in the first half of the year".
The TWI rose as high as 76.18, the highest since mid-2007 when the Reserve Bank last intervened, though Speizer says that was when fundamentals were turning for the currency, and Wheeler wouldn't get the same impact as the last intervention.
Figures published last week showed the Reserve Bank sold a net $199 million of kiwi dollars in December, which has been seen as the RBNZ taking a punt on the currency running out of steam.
The Reserve Bank of Australia will review its target cash rate tomorrow and is expected to cut the benchmark rate a quarter-point to 2.75 percent. The kiwi dollar was unchanged at a six-month high of 81.22 Australian cents at 8am in Wellington from the New York close, and up 80.81 cents at 5pm in New Zealand.
The local currency edged up to 78.45 yen from 78.38 yen on Friday in New York, and was almost unchanged at 61.96 euro cents from 61.97 cents. It edged lower to 53.84 British pence from 53.86 pence last week.
