13 Sep 2010

Dollar hits 73c US, expected to stay strong

12:31 pm on 13 September 2010

The New Zealand dollar is expected to maintain its strength, but it could face pressure if the Reserve Bank plans to keep interest rates on hold for some time.

The kiwi pushed through 73 US cents on Monday morning, with investors exhibiting more confidence about the global economic recovery.

Economists widely expect the Reserve Bank to keep the cost of borrowing on hold this week.

A currency strategist at Westpac, Imre Speizer, says local events may put downward pressure on the exchange rate, especially if the central bank suggests it plans to pause the official cash rate for a long time.

Mr Speizer says US equities tend to perform their worst in September, as trading drops off during northern-hemisphere holidays, so he expects the kiwi's rise to stall.