25 Jul 2011

Doubt drives NZ dollar higher

1:49 pm on 25 July 2011

The inability of American politicians to reach a deal to lift the federal debt ceiling and avoid the possibility of the US defaulting on its loans, has driven the New Zealand dollar to fresh post-float highs.

The kiwi hit 86.75 US cents over the weekend, its highest level since the currency was floated in March 1985.

At 1.20pm on Monday, the dollar was trading at 86.46 US cents, 79.83 Australian, 52.98 pence, 67.78 yen and 0.6002 euro. The Trade Weighted Index was at 73.96.

BNZ currency strategist Mike Burrowes says a weaker US dollar is behind the exchange rates momentum.

The last time the New Zealand dollar was at these levels was in 1981, when the level of the currency was fixed against other exchange rates.