Kiwi hits 3 week high

November 17 - Open

The New Zealand dollar reached three-week highs against the euro and greenback as risk appetite improved.

By 8am the kiwi was at US74.87c and 0.5000 euro, from US74.29c and 0.4967 euro at 5pm yesterday.

The US dollar fell broadly as a rise in United States retail sales failed to change the outlook for US interest rates and disagreement among Asian and US leaders on exchange rates weakened the greenback.

The US dollar managed a brief rally off lows after Federal Reserve chairman Ben Bernanke said the US central bank is attentive to changes in the currency. But as investors digested his comments, they decided there were no signals of change to monetary policy.

Traders focused on the failure of China and the United States to reach an agreement on currencies at an Asia Pacific summit, suggesting China may not be ready to let the yuan rise against the US dollar. That prompted investors to sell US dollars against free-floating currencies such as the euro.

BNZ Capital strategist Mike Jones said demand for growth-sensitive currencies such as the NZ dollar was encouraged by the US dollar weakness and firming commodity prices.

ANZ said light NZ dollar selling going into the Asian fix yesterday afternoon was quickly absorbed by local demand. Offshore attempts to look at the downside were similarly dealt with.

Meanwhile, the NZ dollar rose against the Australian dollar to A79.82c at 8am from A79.54c at 5pm, and was little changed at 66.68 yen by the local open. The trade weighted index was 66.40 at 8am from 66.08 at 5pm.

NZPA