11 May 2009

NZ dollar hits six-month high

7:19 pm on 11 May 2009

The New Zealand dollar hit a six-month high on Monday on renewed optimism that the worst of the global financial crisis has passed.

The Kiwi broke through the 61 cent mark against the US dollar for the first time this year as it notched up its seventh consecutive day of gains.

Strong gains on world sharemarkets and increasing confidence in the American banking system have seen investors pull out of the US dollar in favour of riskier currencies.

These include the New Zealand dollar which has gained 10% against the Greenback in the past two weeks.

This buying interest has been strengthened by the New Zealand dollar bursting through key technical support levels, encouraging more buying.

However, BNZ currency strategist Danica Hampton says investors buying currencies based on economic fundamentals, rather than currency gains, have been less in evidence.

This suggests that the Kiwi has limited upside and Mrs Hampton is picking the currency to trade between US50c and US60c this year.