13 May 2009

Source: NZ Herald

The New Zealand dollar gained against the greenback overnight as growing optimism about the global economy boosted investors' risk appetite.

That led to a sell-off in the US dollar to a four-month low against a basket of currencies as demand for the US currency as a safe haven dwindled.

By 7am the NZ dollar was buying US60.58c from US59.97c at 5pm yesterday.

The kiwi was up slightly against the Australian and Japanese currencies, to A79.19c and 58.40 yen.

The NZ dollar rose to 0.4440 euro at 7am from 0.4412, while the trade weighted index rose to 58.60 from 58.29 at 5pm.

Leading central bankers, including European Central Bank President Jean-Claude Trichet, said the global economy was at an "inflection point" and could turn the corner soon.

"We've passed the worst in the recession," said Matt Esteve, a foreign-exchange trader at Tempus Consulting in Washington.

"We're not necessarily moving into growth yet, but at least the pace of deterioration has slowed."

"As the global economy approaches a turnaround, the (US) dollar has really lost its appeal as a safe-haven investment," he added.