Kiwi at nine-month high eyeing US84c

The New Zealand dollar climbed to nine-month highs against the greenback this morning and looks set to push past the US84c mark.

The kiwi recently traded at US83.88c, up from US83.45c at 5pm yesterday, while on the Trade Weighted Index of major trading partners’ currencies it held steady at 74.60.

The greenback weakened overnight as investors flocked from the safe haven into stocks and risk-linked currencies ahead of the United States Federal Reserve policy meeting today. Appetite for risk was also bolstered by a poll showing morale among German analysts and investors improved sharply in December.

ANZ senior dealer Alex Sinton said the economy was not out of the woods yet, and it could be argued that there had been little in the way of progress in resolving the US “fiscal cliff”.

“Overall as far as the Australasians [currencies] go, it’s still a yield-hunt,” he said.

On the crosses, the kiwi recently traded at 79.64 Australian cents. It was at 69.22 Japanese yen, up from 68.73 yesterday, and slipped to 64.48 euro cents from 64.52 earlier. It rose to 52.05 pence from 51.91p yesterday.

Sinton said the kiwi was unlikely to drop much below US83.5c and might well venture into the US84c territory. The last time the kiwi broke above the US84c mark was in late February this year.