29 May 2009

Source: stuff.co.nz

The New Zealand dollar climbed to a seven-month high early today against the greenback, boosted by credit rating agency Standard & Poor's decision to upgrade the outlook on this country's credit rating to stable.

After peaking around 1.30am above US62.70c, the kiwi slipped lower to be at US62.32c by 8am, still well up on the US61.72c at 5pm yesterday.

ANZ bank today said the NZ dollar appeared in hot demand after credit rating agencies looked favourably on yesterday's Government budget.

It expected to see further attempts to move the kiwi higher, although getting through US62.80c "will not be an easy task", ANZ said.

Sellers still believed various factors would delivered a major correction to current strength.

The NZ dollar climbed to its highest level in more than 6½ months against the Japanese currency, peaking near 60.80 yen. By the local open the kiwi was at 60.38 yen from 59.50 at 5pm.

Similarly the kiwi reached its highest level against the European currency in 6½ months near 0.4509 euro, dropping to 0.4467 by 8am, close to its level at the local close.

Against the Australian dollar the kiwi peaked at a month-high, getting close to A80c, but then tumbled to A79.38c by 8am, slightly below its local close level.

The trade weighted index was up to 59.44 at 8am from 59.12 at 5pm.

The yen fell broadly as a spike in US bond yields and surprisingly strong US economic data attracted Japanese investors into overseas assets.

The greenback also remained under pressure against the euro as strong US durable goods data reduced the need to hold it as a safe haven and worries about a soaring US deficit left some worried that the Federal Reserve would step up debt purchases.