Lower forecast fails to dampen NZD

04:28, Dec 18 2012

The New Zealand dollar rose against the greenback today, holding on to gains after the Treasury announced in its half yearly update that the Government was forecasting a lower surplus of $66 million by 2014-15.

Today's forecast was down from earlier forecasts of $197m. 

The kiwi recently traded at US84.41c, up from US84.32c earlier. It was at 75.0 on the Trade Weighted Index.

ASB Institutional head of institutional FX sales Tim Kelleher said the kiwi had been quiet today.

"It rallied up this morning and has really been quite muted for most of the day, moving in a range of only between 13 to 14 points," Kelleher said.

"The kiwi was unmoved on the Government's half yearly update that it had maintained budget surplus although slightly lower than forecast. Moody's kept its credit rating as is, but having said that the kiwi does look a little bit stretched. I wouldn't be surprised if it can't get to about US84.75c on profit taking," he said.

On the crosses, the kiwi recently traded at 80.04 Australian cents, up from A79.92c earlier. It was at 70.94 Japanese yen, up from 70.6 yen in the morning. Against the euro it was at 64.08 euro cents, up marginally from 64.06 euro cents earlier. It was unchanged against the British pound at 52.05 pence.

Overnight, Kelleher expected the kiwi to trade between US84.10c and US84.60c, with a slight bias towards the downside.