The New Zealand dollar rose against most major currencies, as further progress on the second Greek bailout deal and policy easing in China spurred investor appetite for higher yielding currencies.
The kiwi recently traded at US83.90c, up from US83.70c at 5pm on Friday, while on the trade-weighted index of major trading partners' currencies it fell to 73.53 from 73.73.
Global equities, a broad proxy for risk appetites, posted gains at the close last week amid signs that Greece and its international lenders were close to striking a deal under which the heavily indebted country would receive a second bailout worth 130 billion euro.
Those hopes were bolstered after Greece's cabinet unanimously approved a final set of austerity measures, a key condition placed on the rescue package. That puts it on track to receive an injection of funds before 14.4 billion euro worth of government bonds mature on March 20, a bill it would have otherwise been unable to pay.
On Wall Street, the Standard & Poor's 500 Index closed 0.2 per cent higher at 1361.23, just shy of last year's high. Meanwhile in Europe, the Stoxx 600 rose 0.6 per cent to 265.93.
The government also made progress on its deal with private sector creditors. The final write down and swap for longer dated bonds is now expected to be complete by March 11. Still, the deal does raise the prospect that international ratings agencies could view Greece as technically in default.
Demand for the kiwi was also boosted after Chinese officials further loosened monetary policy over the weekend, dropping the bank reserve requirement 50 basis points to 20.5 per cent in a bid to boost its economy without triggering a spike in inflation. The bid may lift lending capacity in the short term, but suggests China is concerned about a slowdown in growth.
"Expect any enthusiasm in risk this morning to be tempered by reality," said Alex Sinton, a senior deal at ANZ New Zealand.
"The Chinese move on the reserve requirement ratio has been undertaken out of necessity and should temper any spike higher in the New Zealand dollar. Reflection of markets may well see the New Zealand dollar ease back towards support levels in the mid 82c during the week."
On the crosses, the kiwi recently traded at 77.76 Australian cents, up from A77.62c on Friday, and it rose to 66.77 yen from 66.18 yen. It rose to 63.66 euro cents, from 63.49 euro cents previously, and was little changed at 52.94 pence from 52.95 pence.
The kiwi may trade between a range of US82.95c and US83.75c today, Sinton said.
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