30 Jun 2011

Kiwi at highest level since 1985

10:23 pm on 30 June 2011

The New Zealand dollar has reached its highest level against the US dollar and British sterling since floating 26 years ago.

The kiwi hit 83.2 US cents on Thursday afternoon, before easing back to about 82.9 US cents shortly before 10pm.

Analysts say investor optimism has risen after the Greek parliament voted in favour of a package of austerity measures intended to save the country from defaulting on its debts.

The New Zealand dollar has been a recipient of that upbeat mood.

The kiwi hit its highest level against the US dollar since March 1985, and also against sterling, reaching 51.9 pence.

It also made reasonable gains against the euro and Japanese yen, while it matched the Australian dollar, which also experienced stronger demand.

The Trade Weighted Index, a measure of the currency against a basket of the country's major trading partners, hit a three-year high.

Commentators say it could hit 84 US cents in the short term, though concerns about the health of the US economy could choke off any further rally.