NZ dollar falls away from 30-year high against greenback

The New Zealand dollar fell away from its 30-year high against the greenback overnight, as United States Federal Reserve chief Ben Bernanke dampened growing market expectations that another round of monetary easing was on the way.
The New Zealand dollar yesterday surged above US85c, after Mr Bernanke said the Fed could resort to a third round of monetary stimulus if the US economy weakened further.
The kiwi also received a boost from news that gross domestic product (GDP) data showed the economy grew far faster than expected in the first quarter.
By lunch the kiwi dollar hit US85.08c during the day's trading, but by 8am today was at 84.07c with its overnight peak of 84.33c coming at 2.28am.
While the US central bank would be ready to inject more money into the system should the US economy worsen, Mr Bernanke told a US Senate committee that the time had not yet come and noted inflation had picked up since late 2010.
BNZ strategist Kymberly Martin said the New Zealand dollar was the strongest performing currency over the past 24 hours.
This was a direct response to the stronger-than-expected GDP figures, even in a global backdrop of lack-lustre risk appetite.
``The chunky 0.8 percent (0.3 percent expected) expansion in Q1 GDP did not mean February's earthquake was not a significant blow for the economy,'' she said.
``What the GDP results mean is that the broader economy is accelerating, rather rapidly, and with Christchurch itself is doing very well to cope with its dreadful misfortune.''
The GDP increase was all the more notable given the added drag from our biggest trading partner, Australian, suffering a 1.2 percent drop in its GDP for the quarter.
Japan, the fourth-biggest trading market, also experienced a 0.9 percent fall in GDP, as both countries faced their natural disasters, flooding in Australia and a tsunami in Japan.
The dollar spiked higher relative to the Australian dollar, the euro and the British pound after the GDP release.
Overseas, the euro, which had been trading near $US1.4225, shed its gains on Mr Bernanke's remarks and was last down 0.1 percent at $1.4170. His comment also helped the dollar climb from a four-month trough against the yen.
``The dollar has unwound its losses from yesterday because Bernanke has backed away from QE3 (quantitative easing),'' said Richard Franulovich, senior currency strategist at Westpac in New York.
The euro also faced hurdles, traders said, with lingering worries about the euro zone debt crisis likely to keep it under pressure. It retreated from a session high near $US1.43 after Italy was forced to pay the highest borrowing costs on record for new 15-year debt.
The New Zealand dollar was steady against the Australian currency overnight, trading at .7845c at 8am, climbed against the euro to .5945 and was also up against the yen to 66.46, from 66.34 at 5pm yesterday.
Against the British pound, the kiwi rose from 52.22p yesterday, to 52.35p. The trade weighted index was at 72.65.