NZ dollar soars as US dollar declines

New Zealand dollar soared to a new 15 month high of US75.75c today as the US dollar fell to a new 14 month low.

The Australian dollar rose above US93c for the first time in 14 months after minutes from the Reserve Bank of Australia policy meeting reinforced investors' belief that Australian rates are headed higher while US rates are going nowhere.

The NZ dollar rocketed up more than 1c to near US75.50c in the two hours to 5am and went on from there to US75.75c in morning trading. It was US75.33c at 5pm from US74.37c at 5pm yesterday.

Mike Jones, currency strategist at BNZ, said the gains by the Australian dollar were on a more solid footing that the gains for the NZ dollar as the New Zealand economy did not justify a rate hike yet.

That said, the NZ dollar was in an upward trend, he said.

The Reserve Bank of New Zealand is expected to hold interest rates at its review next Thursday but economists expect it to back off from the statement that it expects to keep the official cash rate or below the current level through until the latter part of 2010.

Mr Jones said trading in the NZ dollar was fairly quiet today.

Against the Australian dollar the NZ dollar was at A81.08c from A80.96c at 5pm yesterday.

The NZ dollar reached a 16-month high of 0.5066 euro today and was 0.5029 by 5pm from 0.4997 yesterday.

It was 68.06 yen at 5pm from 67.54 yesterday evening.

The trade weighted index lifted to 67.25 from 66.74.

- NZPA