Kiwi up on safe-haven buying

20:27, Feb 25 2013

Safe haven buying pushed the New Zealand dollar slightly higher against major currencies overnight as investors fretted about the prospect of a hung parliament in Italy.

The kiwi was recently trading at US83.72 cents, up from US83.62c at 5pm yesterday, while on the Trade Weighted Index of major trading partners' currencies it was unchanged at 76.60.

ASB Institutional head of FX sales Tim Kelleher said the kiwi had stayed within the US83.50c to US84c range overnight in a relatively quiet trading session.

"If anything, we've seen a bit of safe haven buying of kiwi-euro and kiwi-sterling."

The euro slumped overnight on fears that a centre right Italian election victory or hung parliament would threaten the painful but necessary fiscal reforms that are in place.

The British pound continued to see weakness as a result of ratings house Moody's stripping the UK of its coveted triple-A credit rating over the weekend.

On the crosses the kiwi recently traded at 81.41 Australian cents, up from A81.35c at 5pm yesterday, and 63.88 Euro cents, up from 63.40 Euro cents.

It opened at 77.36 Japanese yen, down from 78.65 yen yesterday evening, and 55.12 British pence, down slightly from 55.26p.