2 Jun 2009

NZ dollar eases back from 7-month high

9:52 pm on 2 June 2009

The New Zealand dollar eased back on Tuesday after hitting a seven-month high against the US dollar overnight.

The Kiwi breached US65.6 cents as global sharemarkets continued to chalk up big gains, but has since fallen under the US65c mark.

The dollar hit a high of US82c in March 2008 but fell to US49c by March this year. It has now made up 50% of the loss.

The Kiwi has benefited from investors bailing out of the Greenback on fears over US debt and further big gains on world sharemarkets.

The rally in world sharemarkets caused investors to look at so-called riskier currencies such as the New Zealand and Australian dollars.

But the Kiwi has also performed well against currencies other than the Greenback.

It has gained 4% against other major currencies since international agency Standard & Poor's upgraded the New Zealand Government's credit rating following the Budget announcement last Thursday.

Currency experts say the Kiwi could reach US70c over the next six months. However, the believe it may fall as low as US50c if economic data does not meet growing expectations of a recovery in the world economy.