The New Zealand dollar rose amid concerns the European Union summit on Thursday will fail to deliver a concrete solution to the regions debt crisis and as weaker-than-expected data boosted demand for high yielding currencies, such as the kiwi.
The New Zealand dollar traded at 79.20 US cents just before
8am up from 78.85 cents at 5pm yesterday. The trade weighted index increased to 71.87 from 71.64.
Markets are focused on the EU's two-day summit in Brussels on Thursday to see if any decisive steps will be taken towards solving the euro-zone's debt crisis. It will be the first summit since Greece's parliamentary elections on June 17 that saw victories for pro-bailout parties. French and Italy are urging Chancellor Angela Merkel to take conclusive steps to end the crisis, now in its third year.
"The local currencies, the kiwi and the Aussie, performed relatively well overnight, deferring any news out of Europe until we get past the meeting at the end of the week," said Stuart Ive, currency strategist at HiFX. Figures showing American consumers have become less optimistic also helped lift the kiwi, he said.
In the US, consumer confidence fell to a five-month low as mounting concern over jobs and incomes dimmed the outlook for spending. The Conference Board's sentiment index fell to 62 from a revised 64.4 in May.
