The New Zealand dollar rose as optimism European leaders are making progress on plans to resolve the region's sovereign debt crisis helped global equity markets and commodities to rally.
The kiwi dollar was at 75.51 US cents just before 8am, up from 75.03 cents at 5pm yesterday.
Germany and France
are pushing for powers to reject national budgets within the euro zone that don't comply with European Union rules, a form of fiscal union that could strengthen the region's ability to avoid recession, Reuters reported.
"Policy makers are working hard in the background to find a solution," said Mike Jones, market strategist at Bank of New Zealand. There is a meeting between European Union leaders tonight and one next week and the markets will be looking to these meetings for certainty, he said.
The National Bank Business Outlook survey yesterday showed business confidence improved this month, stoking optimism the economy is gaining pace and potentially reducing the prospects for the central bank to cut the official cash rate from a record low 2.5 per cent, as traders are speculating.
