The New Zealand dollar edged up against the greenback overnight. Photo / Brett Phibbs
The New Zealand dollar edged up against the greenback overnight, but remained largely within the US71c to US71.50c band where it has spent most of the time since Monday night.
Around 8am today the kiwi was buying US71.40c from US71.17c at 5pm yesterday as the United States dollar weakened broadly
amid rising risk appetite.
The greenback fell against the euro and yen after Singapore effectively revalued its currency and upbeat US data and company earnings boosted appetite for currencies perceived as benefiting from higher risk appetite.
Investors also sold the greenback as Federal Reserve chairman Ben Bernanke, in congressional testimony, reiterated that the central bank currently anticipates that ``very low, extremely low' interest rates will be needed for an ``extended period' given expectations for a moderate US economic recovery.
Singapore's move was seen as a mark of confidence in the economic recovery and also fuelled speculation China could also allow its currency to appreciate against the US dollar.
Analysts said robust US retail sales and strong corporate earnings also boosted risk sentiment.
The NZ dollar edged up to 0.5228 euro at 8am from 0.5211 at the local close, and lifted to 66.53 yen at the local open from 66.32 yen at 5pm.
Against the Australian dollar, the kiwi was stuck in a tight band overnight and at the local open was at A76.38c, while the trade weighted index lifted to 65.81 at 8am from 65.69 at 5pm.
BNZ strategist Mike Jones said data out yesterday, showing an unexpected fall in February retail sales, would certainly help the Reserve Bank if it wanted to make a case to delay its first interest rate hike until July.
That sentiment was reflected in market pricing, with traders paring expectations for a 25-basis point rise in June to a roughly 50/50 chance.
In response the NZ dollar had skidded below US71c, but once again found support in the US70.70c to US70.80c region. Overnight the broad-based slide in the US dollar saw the NZ dollar recover against the greenback, Mr Jones said.
- NZPA
