The New Zealand dollar rose more than one and a half US cents during the long holiday weekend as investors became more comfortable with risk-sensitive assets as global equity markets soared.
The kiwi dollar rose to 80.86 US cents at 8am from 79.17 cents at 5pm on Friday. That's the
highest level since September 20.
A strong manufacturing report from China and a better-than-expected earnings result from Caterpillar helped stoke investor sentiment, with local optimism buoyed by New Zealand's Rugby World Cup victory during the weekend.
European leaders said after a weekend summit that good progress had been made and investors are now waiting for the outcome of a second summit on Wednesday. The eurozone is being urged to combine two proposals, an insurance model and a special purpose investment vehicle, Reuters reported.
"There is a general risk-on theme today," said Mike Burrowes, market strategist at Bank of New Zealand. "It seems to be on hopes that the EU is getting close to getting final detail together for a rescue package."
