The New Zealand dollar appears to have finally turned the corner, ending a four-year downward spiral that has seen it lose 42 per cent of its value.
The kiwi yesterday zoomed up more than 1USc to an eight-week high of 41.60USc, spurred by a fall in the US dollar precipitated by concerns the US economy will have a hard landing.
One dealer said the kiwi was likely to hit blue sky if it clears the next major hurdle. "The next resistance level from here is 41.80USc and if it breaks through that there's blue sky to about 43c. If it got through there I'd expect it to kick on a bit," he said.
The Australian dollar bounced nearly 1.5c to 53.52USc from Thursday night's close.
Looking longer term, Simon Tyler, head of treasury at National Bank, said the kiwi looked like it had turned the corner. "There have been a number of international investment banks come out just recently to say that it is undervalued and the decline looks like it's over," Mr Tyler said.
Last week, US investment bank Goldman Sachs forecast the kiwi would rise 33 per cent against the US dollar in the next year.
Mr Tyler said Goldman Sachs' forecasts were not off the wall. "It seemed pretty low when it was under 40c and it wouldn't be overvalued if it was in the high 40s," he said.
Speculators who have helped drive the kiwi down from over 71.7USc in November 1996 were today chasing the kiwi, Mr Tyler said.
However some analysts said the ride may be rough with the "hot money" speculators piling into the antipodean currencies.
- NZPA
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