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Risk Rally Pushes NZD to Records vs. Dollar

August 1, 2011 at 7:34 by Andriy Moraru

New Zealand dollarThe New Zealand dollar reached a new historical maximum against its North American counterpart and grew against some other world currencies today, as the US debt ceiling agreement spurred demand for high-yielding assets.

The kiwi (which is how the NZD is often called) renewed its historical maximums versus the US dollar and the euro today. It also reached a new high level in more than a year against the Japanese yen.

The global hunger for risk increased significantly as the President Obama announced that the political parties has reached a deal on the US debt ceiling last night. The debt limit will be raised by at least $2.1 trillion (up from the current $14.3 trillion), while the government spending will be cut by about $2.5 trillion over next 10 years. Improved certainty with the future of world’s biggest economy spurred demand for the high-yielding currencies among the Forex traders.

NZD/USD rose from 0.8785 to 0.8822 as of 7:30 GMT after reaching a daily high at 0.8842 today. NZD/JPY went up from 67.99 to 68.42 with a daily maximum at 68.87 — the record level since early May 2010. EUR/NZD fell from 1.6334 to 1.6304.

If you have any questions, comments, or opinions regarding the New Zealand Dollar, feel free to post them using the commentary form below.

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