Strong start for kiwi dollar
The New Zealand dollar posted fresh historic highs against the British pound and the South African rand, with the strength of the Kiwi economy versus its moribund peers boosting demand for the currency.
The kiwi last traded at 53.95 pence, down from 54.04 earlier this morning – its highest level since the currency was floated.
Meanwhile, the New Zealand dollar also posted a fresh all time high against the rand, recently trading at R7.51.
Imre Speizer, a market strategist at Westpac, said the moves appear to be driven by weakness in the British and South African economies rather than any further surge in demand for the New Zealand dollar, which still remains strong.
Official figures show the British economy shrank by 0.3 per cent in the December quarter putting it on track to hit a triple dip recession.
Speizer said market bets are tipped towards further quantitative easing from the Bank of England, which should keep pressure on the sterling in the near term.
Similarly, the South African economy has come under pressure as its key mining sector was crippled by labour strikes, and the ongoing softness in the euro zone dampened demand for its agriculture commodities.
Meanwhile the New Zealand currency is expected to continue appreciating against the US dollar until the middle of the year.
The kiwi recently traded at US84.53 cents, with Speizer expecting it to break the previous historic high of US88.40c before July.
This morning the kiwi surged against the yen, rising to 78.47 Japanese yen from 77.20 Japanese yen at the end of Friday.