JASON KRUPP Last updated 08:49 01/02/2012
The New Zealand dollar rose to a fresh four month high against the greenback, lifted by the upbeat sentiment in the wake of yesterday's European Union summit, where 25 member states agreed to tougher budgetary rules in a bid to stop a repeat of the Greek crisis.
The kiwi recently traded at US$82.57 cents, up from US$82.29c at 5pm yesterday, and rose to 72.27 on the Trade Weighted Index of major trading partners' currencies from 72.20.
Yesterday's summit deal saw the euro track upwards, peaking in the session at US1.3209, a move that was supportive of risk currencies such as the kiwi and Australian dollar.
Commodity-linked currencies however managed to sidestep the sudden reversal in risk appetites seen after official figures showed US consumer confidence dropped unexpectedly in January and a measure of business activity fell.
That saw Wall Street dip into the red, giving up the earlier positive momentum from strong closes in Europe. In afternoon trade, the Standard & Poor's 500 Index fell 0.2 per cent to 1311.10, whereas Europe's Stoxx 600 Index closed 0.8 per cent higher at 254.41.
"In the short term the commodity currencies have positive momentum, but the kiwi and Aussie are overbought, and I believe a reversal is nearby," said Imre Speizer, a market strategist at Westpac. "I wouldn't say that will happen today, but in the next week or two, very likely"
On the crosses, the kiwi recently traded at 77.78 Australian cents, up from A77.37c yesterday, and it rose to 62.96 yen from 62.75 yen. It climbed to 63.12 euro cents from 62.40 euro cents previously, and gained to 52.37 pence from 52.30 pence at 5pm.
The kiwi may trade between a range of US81.60c and US83c, Speizer said, with the bias tipped towards the upside over the course of the day.
http://www.stuff.co.nz/business/market-data/currencies/6346295/NZ-dollar-hits-fresh-high-on-euro-deal
