WELLINGTON--The New Zealand dollar was higher late Tuesday, benefiting from a rise in the Australian dollar after the Reserve Bank of Australia cut its official cash rate by 25 basis points, and due to hopes that a Group of Seven teleconference on the euro zone later in the global day would produce a positive result. The Kiwi tracked the euro's strong rise early in the New Zealand session because of hopes that the G-7 finance ministers "might come together, Avengers-style, and save the world," Western Union Business Solutions Corporate Dealing Manager Chris Hunter said. He noted, however, that the most likely outcome would be another round of rhetoric on how Europe "must do more." The New Zealand dollar also moved higher after the RBA rate cut, which wasn't as severe as some people were expecting. "There was obviously the fear that a 50-basis-point cut was a possibility," Mr. Hunter said. Westpac Bank Senior Strategist Imre Speizer noted that the chances of a European or U.S. policy response during the next few weeks were growing, providing temporary support for the New Zealand dollar. He said a corrective bounce would target the US$0.7650-US$0.7850 level during the next few weeks. However, while most momentum indicators are pointing the Kiwi upward, "weaker global growth into the fourth quarter should propel it below US$0.7370," Mr. Speizer said. Little local data over the course of the week means investors' focus will remain on Europe. However, BNZ FX Strategist Mike Jones noted that declines in New Zealand commodity prices have eroded support for the Kiwi of late. As a result, this week's GlobalDairyTrade auction will be closely watched. GlobalDairyTrade is an international trading platform established by New Zealand's Fonterra Co-Operative Group Ltd. Government bonds ended slightly higher but trading was quiet after Friday's sharp rally. Write to Rebecca Howard at rebecca.howard@dowjones.com

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