8 Sep 2016

NZ shares and currency storming higher

1:27 pm on 8 September 2016

A surge on New Zealand's financial markets that has driven the dollar to a 16-month high and the local sharemarket to new records shows no signs of abating.

New Zealand money.

Photo: RNZ / Alexander Robertson

The New Zealand dollar has hit its highest levels since May last year against the US dollar and the trade weighted basket of currencies which the Reserve Bank watches.

So far this year the currency is up about nine percent.

And it is a similar story with the local sharemarket, which has gained nearly 20 percent, driven by low interest rates which is driving investors to look for better returns.

Derek Rankin, who heads the foreign exchange advisory firm, Rankin Treasury, said New Zealand's currency and other investment assets were being driven by a global demand for safety and yield.

He said he did not see that ending any time soon.

"What we are seeing is foreign capital coming into New Zealand - we're seeing that in the property space, we're seeing it in the bond space and we're seeing it in the equity markets as well," he said.

The Kiwi was trading at 74.45 US cents at 8am this morning.

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