Kiwi holds high against Aust dollar

THE New Zealand dollar held near a three-year high against the Australian dollar after figures showed China has become the country's biggest trading partner, beating the kiwi's Anzac cousin.

The kiwi traded at 82.70 Australian cents at 5pm on Friday in Wellington from A82.65c on Thursday, having climbed as high as A82.85c. The local currency rose to 85.30 US cents at 5pm from US84.77 cents at 8am.

On Friday, it was revealed exports to China jumped 32 per cent to $2.3 billion and imports rose 2.8 per cent to $1.8b, outpacing trade with nearest neighbour Australia.

Australia took $2.2b of New Zealand's exports, down 7.3 per cent, and sent $1.5b of its produce across the Tasman (down 5.3 per cent), according to Statistics New Zealand.

New Zealand's growing reliance on Chinese trade has coincided with a parting of ways in the economic fortunes with Australia, as the local central bank looks poised to hike rates as its next move, while the market is pricing in cuts to Australia's benchmark rate.

"The trade figures were quite good and might get a little more attention than usual due to the fact that China has overtaken Australia as the number one export destination for New Zealand," said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney.

"The interest rate differential is the key driver" for the kiwi's gain against Australia's currency, he said.

The kiwi fell to 84.23 yen at 5pm on Friday from 84.64 yen on Thursday after the Bank of Japan affirmed its annual increase to the monetary base by about 60 trillion to 70 trillion yen.

The kiwi increased to 65.43 euro cents from 65.37 cents yesterday and dropped to 55.184 British pence from 55.68 pence following the stronger-than-expected GDP figures.

The trade-weighted index was little changed at 78.75 from 78.92 on Thursday, and is heading for a 0.9 per cent weekly gain.

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NZ dollar hits five-year high against yen

THE New Zealand dollar rose to a five-year high against the yen following the Bank of Japan's announcement last week of moves to end deflation and weaken its currency.

The kiwi rose to 82.61 yen and earlier reached 82.68 yen, the highest since May 2008, from 82.21 yen in New York on Friday. It slipped to 84.13 US cents from 84.31 cents as equity markets fell in the wake of weak US payrolls data.

Bank of Japan governor Haruhiko Kuroda last week announced plans to double monthly bond purchases to about YEN7.5 trillion ($NZ92.42 billion) yen as he seeks to achieve 2 per cent annual inflation in two years.

Billionaire investor George Soros and Pacific Investment Management bond fund manager Bill Gross have both said the plan risks weakening the yen, Bloomberg reported.

"With the BOJ's game changer we can expect more strength in the kiwi against the yen," said Mike Jones, strategist at Bank of New Zealand.

Mr Jones also expects further deterioration in US dollar sentiment after the Labor Department said payrolls increased by 88,000 workers in March against forecasts of 200,000 new jobs, adding to concern the world's biggest economy is experiencing a further bout of weakness.

The trade-weighted index edged up to 77.69 from 77.64 in late New York trading on Friday.

The kiwi slipped to 81.09 Australian cents from 81.23 cents and was little changed at 54.96 British pence. It was at 64.86 euro cents from 64.89 cents.

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Cyprus scrambles against economic meltdown

CYPRUS is scrambling to overhaul its banking sector to avoid financial meltdown, after the European Central Bank threatened to pull the plug on emergency funding for the island's lenders.

Cypriot politicians have until Monday to approve a Plan B bailout deal with the European Union and International Monetary Fund or face being choked from the European funds, which would likely cause teetering banks to collapse.

One source warned that Cyprus risked expulsion from the eurozone if parliament failed to approve a workable plan to restructure its outsized banking sector by Tuesday.

But MPs adjourned an emergency session late on Thursday without voting on the first two bills in a package of draft legislation the government has drawn up as part of its revised plan.

They said they needed more time to study the plans to set up a "national solidarity fund" and impose capital controls to prevent a run on the banks when they reopen on Tuesday after more than a week.

The new solidarity scheme would nationalise pension funds, with bonds issued against future natural gas revenues. The second bill would "impose temporary restrictive measures on the movement of capital".

Central bank chief Panicos Demetriades said legislation had also been drafted on reorganising the Cypriot banking system.

"This consolidation process will prevent the risk of bank failures and protect in their entirety all insured deposits up to the amount of 100,000 euros ($A124,000)," he said as he entered the presidential palace for emergency talks with the cabinet.

MPs on Tuesday rejected a highly unpopular measure, which would have slapped a one-time levy of up to 9.9 per cent on bank deposits as a condition for the loan.

Speaker of parliament Yiannakis Omirou insisted a revised levy on bank deposits was not on the table, a move seen as placating Russians who are believed to have more than $US30 billion ($A28.9 billion) in private and corporate cash in Cyprus banks.

Around 200 people protested outside the legislature, mostly employees of the Laiki or Cyprus Popular Bank, which is in the eye of the storm.

As the government urged people not to panic, Popular Bank announced a limit on withdrawals of 260 euros a day because of a "high demand for cash" from its ATMs, under siege by customers drawing their daily limits of up to 700 euros.

Acting leader of the ruling Disy party Averof Neophytou said restructuring Popular Bank would provide 100-per cent protection for 361,000 out of 379,000 account holders.

The remainder would not enjoy full protection because they exceeded the 100,000-euro limit for deposit insurance.

He added that restructuring the banks would also cut their recapitalisation needs, meaning the sum Cyprus needs to raise from its own resources in return for a 10-billion-euro bailout would be reduced from 5.8 billion euros to 3.5 billion.

The troika of lenders - the EU, ECB and International Monetary Fund - agreed to the 10-billion-euro bailout on Saturday provided Cyprus came up with the rest.

The chairman of the Eurogroup of finance ministers, Jeroen Dijsselbloem, said currency partners were willing to work with Nicosia on its new plans.

"The Eurogroup stands ready to discuss with the Cypriot authorities a draft new proposal, which it expects the Cyprus authorities to present as rapidly as possible," Dijsselbloem said after a two-hour conference call with fellow ministers.

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Thousands rally against EU austerity

Thousands of protesters have rallied in Brussels to vent their anger at austerity measures. Source: AAP

THOUSANDS of protesters have rallied in Brussels to vent their anger at austerity measures and press EU leaders gathered for a summit to focus on investing in jobs.

Organisers said 15,000 people took part in the rally in the Cinquantenaire park a short walk from the European Union headquarters, where the bloc's 27 leaders were to meet for talks.

Factory workers, teachers, students and union activists from Belgium, Britain, France, Germany and other EU countries chanted "Revolution!" and waved placards reading "No to Austerity!"

"We don't want the austerity measures they are forcing on the people of Europe. What we need are measures to get people back to work. That's how we move forward," said protester Adam Baudoin, an activist with Belgium's CSC union wearing a green hardhat.

Protesters urged the gathered leaders to end cutbacks in government spending, to boost investments to create jobs and to make banks and corporations pay more to help end Europe's economic crisis.

"Why should the people be paying for the crisis the banks created?" asked Danish protester Mads Hadberg, a 25-year-old student. "People are losing jobs, health benefits, pensions - and the rich are getting richer."

Among the protesters were some 3000 workers for US heavy machinery firm Caterpillar, which recently announced plans to slash 1400 Belgian jobs, and several hundred from ArcelorMittal steel plants in Belgium and France that have suffered job cuts.

The rally, organised by the 85-member European Trade Union Confederation, took place without incident as protesters were kept away from the summit site by tight security.

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Thousands rally against EU austerity

Demonstrators march during a protest against unemployment and austerity measures. Picture: AP Source: news.com.au

THOUSANDS of protesters have rallied in Brussels to vent their anger at austerity measures and press EU leaders gathered for a summit to focus on investing in jobs.

Organisers said 15,000 people took part in the rally in the Cinquantenaire park a short walk from the European Union headquarters, where the bloc's 27 leaders were to meet for talks.

Factory workers, teachers, students and union activists from Belgium, Britain, France, Germany and other EU countries chanted "Revolution!" and waved placards reading "No to Austerity!"

"We don't want the austerity measures they are forcing on the people of Europe. What we need are measures to get people back to work. That's how we move forward," said protester Adam Baudoin, an activist with Belgium's CSC union wearing a green hardhat.

Protesters urged the gathered leaders to end cutbacks in government spending, to boost investments to create jobs and to make banks and corporations pay more to help end Europe's economic crisis.

"Why should the people be paying for the crisis the banks created?" asked Danish protester Mads Hadberg, a 25-year-old student. "People are losing jobs, health benefits, pensions - and the rich are getting richer."

Among the protesters were some 3000 workers for US heavy machinery firm Caterpillar, which recently announced plans to slash 1400 Belgian jobs, and several hundred from ArcelorMittal steel plants in Belgium and France that have suffered job cuts.

The rally, organised by the 85-member European Trade Union Confederation, took place without incident as protesters were kept away from the summit site by tight security.

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