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NZ dollar hits record high vs euro

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NZ dollar hits record high vs euro

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The New Zealand dollar has risen to a record-high versus the euro (file)

The New Zealand dollar has risen to a record-high versus the euro (file)

The New Zealand dollar rose to a record-high versus the euro and a multi-month high against the greenback after central banks in Europe, England and China eased borrowing costs on concerns about the global economic outlook.

The New Zealand dollar rose as high as 64.99 euro cents, the highest since the 17-nation currency entered circulation in 2002. It traded at 64.85 euro cents at 8am, up from 64.01 cents on Thursday at 5pm.

The kiwi climbed to a fresh two-month high of 80.71 US cents, and traded at 80.35 cents at 8am up from 80.21 cents on Thursday.

Europe's shared currency weakened against higher-yielding peers, including the kiwi, after the European Central Bank cut its key interest rate by 25 basis points to a record-low 0.75 per cent and reduced its deposit rate to zero for the first time.

China unexpectedly cut its key interest rate for the second time in a month and the Bank of England raised its asset-purchase target by 50 billion pounds to 375 billion pounds.

"All of this is good stuff for the kiwi against the euro, which has well and truly smashed up to a new high," said Dan Bell, currency strategist at HiFX.

"The New Zealand dollar will continue to rise against the euro and the pound - whilst we are not firing up all cylinders we are outperforming most developed countries."

The New Zealand dollar increased to 51.73 British pence from 51.43 pence.

Traders will be looking at US employment data on Friday US time. Non-farm payrolls are expected to show the world's biggest economy added 90,000 jobs last month, according to a Reuters survey.

The New Zealand dollar rose to 64.17 yen at 8am from 64.02 yen at 5pm on Thursday. The trade weighted index increased to 72.80 from 72.51.

NZN

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6/07/2012 12:21:08 p.m.

Mike wrote:

It not that the Kiwi is at a high, it is the Euro is at a low.

Multiple bailouts do that to a currency and while 5 now in the bailout status, there are currently another 7 EU economies in a bad state that may need bailouts. The EU needs to clean house and fix the problem, as the bailouts dont really fix the problems that created the problem needing a bailout in the first place.

Its like you have a problem gambler who owes money. Instead of stopping the gambling, you just bail them out. Thats pretty much the EU situation currently. Till they fix the problem, and even admit they have a problem, it wont be fixed.

NZ directly isn't affected much by the EU, as they have the worst trade rescrictions blocking out exports. Eg the EU is a bigger economy than the USA, but we export more with pretty much everyone else but the EU.

EU problems do flow to world problems just by their size alone. Our 2 biggest trading partners of Australia and China, our currency has fallen, ie its just the EU fallen even more than our currency, not that our currency has strengthened.