Currency: Dollar still vulnerable

The New Zealand dollar rose from multi-week lows today but is seen vulnerable to swings in sentiment about the global economy.

The NZ dollar was at US62.76c at 5pm from US62.85c at the same time yesterday. It recovered from a month low around US61.95c in overnight trading.

BNZ Capital said widening NZ-US swap spreads are providing support for the NZ dollar but global risk appetite is still the prime driver.

The NZ dollar has been at multi-week lows against a resurgent yen but by 5pm had risen to 58.50 yen from 58.00 at 8am. It was 59.27 at the same time yesterday.

The yen has been attracting safe-haven buyers as risk appetite waned this week and on Wednesday the yen surged to a five-month high against the US dollar and two month high against the euro. The yen was steadier today as was the US dollar.

The NZ dollar has had little local data to trade off this week, though traders noted news of a fall in electronic card transaction in June as evidence consumers are using credit cards less.

ANZ bank said the cancellation of a coal shipment to China ensured the Australian dollar was "crushed" overnight.

Against the Australian dollar the NZ dollar eased to A80.27c at 5pm from A80.53c at 8am after it was reported that the Australian unemployment rate rose to a six-year high of 5.8 per cent in June. This was less than the 5.9 per cent the market was expecting.

The NZ dollar was unchanged at 0.4515 euro from yesterday and on its trade weighted index it rose to 59.58 at 5pm from 59.46 at 8am. It was at 59.68 yesterday.

Currency rates:

NZ dlr/US dlr US62.76c US62.85c

NZ dlr/Aust dlr A80.27c A79.86c

NZ dlr/euro 0.4515 0.4515

NZ dlr/yen 58.50 59.27

NZ dlr/stg 38.99p 39.03p

NZ TWI 59.58 59.68

Aust dlr/US dlr 78.17c 78.68c

Euro/US dlr 1.3906 1.3916

US dlr/yen 93.20 94.30

- NZPA