NZ dollar sets new records against Aussie, euro   23 Mar 2015

NZ dollar sets new records against Aussie, euro

By Tina Morrison

March 23 (BusinessDesk) - The New Zealand dollar set new records against the euro and the Australian dollar as investors sold the greenback on concern the US may hike interest rates later than previously expected.

Over the weekend, the kiwi touched a post-float record 97.46 Australian cents, beating its previous high of 97.22 cents from earlier this month. The local currency also marked a new record against the euro of 70.14 cents, edging past the 70.13 cent high from the week earlier. The New Zealand dollar touched a two-week high of 75.91 US cents over the weekend, and was trading at 75.52 cents at 8am in Wellington, from 75.65 cents at the New York close and 74.31 cents at 5pm in Wellington on Friday.

Last week the US dollar fell from its highest in more than a decade as traders pared back their expectations for when the US Federal Reserve may start to hike interest rates. That followed the US central bank meeting on Thursday, at which it removed a reference to being ‘patient’ from its statement as expected, paving the way for interest rate hikes at future meetings. However, at the same time, it lowered its outlook for growth, inflation and interest rates, and emphasised it wasn’t ‘impatient’.

"The US dollar was buffeted late last week," ANZ Bank New Zealand senior economist Philip Borkin and senior FX strategist Sam Tuck said in a note. "With the US dollar swinging wildly it was notable that the New Zealand dollar squeezed higher when markets were selling the US dollar, and was much more resistant to US dollar buying than the Australian dollar. This created a new post-float high in this cross" and "a new marginal post-float high" in the euro.

The New Zealand dollar was trading at 97.19 Australian cents at 8am in Wellington, from 96.80 cents at 5pm on Friday, and at 69.69 euro cents, from 69.55 cents on Friday.

ANZ expects the kiwi to trade between 97.10 Australian cents and 97.80 cents today, and between 69.10 euro cents and 70.40 cents.

In New Zealand today, Westpac Bank releases its first quarter consumer confidence survey at 10am.

The kiwi touched a two-month high of 91.13 yen over the weekend, and was trading at 90.59 yen at 8am from 89.71 yen on Friday. It advanced to 50.54 British pence from 50.31 pence on Friday. The trade-weighted index rose to 79.12 from 78.21 on Friday.

(BusinessDesk)

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