The New Zealand dollar forged ahead today, recovering the more than 2USc lost in the last week in the wake of Japan's catastrophic earthquake and tsunami, followed by a nuclear crisis in the world's third-largest economy.
The New Zealand dollar forged ahead today, recovering the more than 2USc lost in the last week in the wake of Japan's catastrophic earthquake and tsunami, followed by a nuclear crisis in the world's third-largest economy.
Having dropped to a seven-month low around 71.15USc on Thursday morning, the kiwi hit a high at 5pm of 73.75USc today. The currency gained about a third of a US cent during the session.
"Investors have shrugged off concerns in Japan and the Middle East for now to give risk assets a boost with equities, commodities and high yielding growth currencies all benefiting," said Daniel Bell of HiFX.
Global equity markets rallied, including Tokyo's Nikkei share average which was up more than 35 this afternoon. The Nikkei plunged 145 last week as concerns grew about a crippled nuclear power plant in northeastern Japan.
"We are expecting another volatile week for the NZD as the market comes to terms with developments in Japan as well as the local release of our fourth quarter GDP [gross domestic product] this Thursday, where some economists are picking a negative quarter of growth," Mr Bell said.
Against the Australian dollar, the kiwi rose a touch to 73.31Ac from yesterday's 73.27Ac. The kiwi was also firmer against other key currencies, rising to €0.5185 from €0.5173, to 45.24p from 44.21p, and to ¥59.73 from ¥59.35.
The trade weighted index was consequently higher, at 64.61 from 64.37.
The euro pushed on from its overnight five-month high overnight around $US1.4200, trading at $US1.4220 late this afternoon. The single currency was boosted by growing expectations of a rate hike by the European Central Bank at their April 7 meeting, Mr Bell said.
The US Federal Reserve, in contrast, was focusing on stimulus, meaning rate rises were further off for the greenback.
