NZ dollar stronger against Aussie

Photo / Dean Purcell

The New Zealand dollar strengthened against the Australian currency when trading started for the week, following the weekend's inconclusive election result across the Tasman.

After dropping to around A79c on Saturday morning, the kiwi shot up to A79.59c at 8am, as the aussie fell against the greenback.

The Australian dollar was buying US88.60c at 8am today from around US89.40c on Saturday.

Imre Speizer, senior currency strategist at Westpac, said the Australian dollar was punished early today after the election failed to deliver a clear result.

The aussie would be volatile today, given the hung Parliament, and the NZ dollar would follow the direction of its trans-Tasman counterpart.

The NZ dollar dipped against the greenback after the market opened today, buying US70.50c, similar to its level at 5pm on Friday.

The kiwi dropped to around US70c late on Friday, but then recovered early Saturday, even as the US dollar rose against major currencies amid heightened worries about the global economy and declines in stock prices.

The euro hit a more than five-week low near $US1.2660 after European Central Bank Governing Council member Axel Weber said the ECB should extend its loose monetary stance, raising fears of more economic weakness ahead in the euro zone.

Investors also dumped stocks and commodities and piled into US Treasuries in a flight to quality on worries that a US slowdown beginning in the second quarter this year risks dragging the global economy into a renewed slump.

The NZ dollar was up to 0.5548 euro at 8am from 0.5502 at 5pm on Friday, and was up to 60.35 yen from 60.06.

The trade weighted index was 66.23 at 8am today from 65.95 at 5pm on Friday.

- NZPA