The New Zealand dollar rose as commodity prices continued to reverse their recent slide, helping underpin the currency amid resurgent European debt fears.
Commodities were the only asset class to gain on Friday in New York, with the Thompson Reuters Jefferies CRB Index, a measure of 19 soft and hardcommodities, gaining 0.7 per cent to 341.
That saw demand for growth-linked currencies such as the Kiwi and the Australian dollar rise, and helped them avoid the pull back on other markets seen after Fitch Ratings downgraded Greece's credit from BB+ to B+, four levels below investment grade, and placed the country on negative outlook.
Separately, Greek and European Central Bank officials over the weekend backed away from a proposed "soft restructuring" plan, whereby private bond holders agree to extend the maturity on the loans, in favour of more aggressive cut to government spending.
The move, touted by the International Monetary Fund, met resistance from the central bank which said it would no longer accept Greek bonds as collateral if they were re-profiled.
"The evening was all about the negative euro zone headlines, which clobbered most asset classes except for commodities," said Imre Speizer, a market strategist at Westpac Banking Corp.
"The kiwi was the clear outperformer in the session, also helped by lingering positivity from the budget."
The kiwi recently traded at 79.44 US cents, down from 79.36 cents on Friday, and rose to 69.06 on the trade-weighted index of major trading partners' currencies from 68.59.
It gained to 74.57 Australian cents from 74.27 cents last week, and climbed to 64.88 yen from 64.77 yen. It climbed to 56.18 euro cents from 55.34 cents on Friday, and was little changed at 48.91 pence from 48.90 pence previously.
The kiwi dollar may trade between a range of 78.80 US cents and 80 cents, Speizer said, with upward moves likely to encounter strong resistance around the 80 cents level.
