Currency: Dollar climbs over US64c

The New Zealand dollar traded in a narrow range during its domestic session ahead of the US Federal Reserve's policy announcement tomorrow.

The NZ dollar had risen more than 1-1/2c overnight against the greenback, which was heavily sold off. The euro and sterling also rose.

The NZ dollar was at US64.07c at 5pm from US62.77c at the same time yesterday. It traded between US63.73c and US64.19c during today's domestic session.

The higher end of the range was being tested as the local market closed.

There was little immediate reaction to the Westpac McDermott Miller confidence survey which recorded consumer confidence in New Zealand at its highest level in 18 months.

"I think the market is waiting to see what is embedded in this Fed interest rate decision in relation to where interest rates are heading," one dealer said.

A Federal Reserve policy announcement is due at 6.15am tomorrow morning (NZ time). No move on US interest rates is expected, but investors will focus on what the Fed says about the economic outlook.

New Zealand current account data is also due tomorrow at 10.45am, and on Friday gross domestic product data for the March quarter is due.

ANZ bank said the US dollar also fell sharply against the Australian dollar and the euro, as well as against the NZ dollar.

The key driver was hard to pin down, illustrating the fickle nature of markets, particularly currency markets, at present.

The NZ dollar was buying 0.4545 euro at 5pm from 0.4529 yesterday, and rose to 61.25 yen from 59.79.

Against the Australian dollar, the NZ dollar was up to A80.45c from A80.11c, while the trade weighted index rose to 60.49 from 59.74.

- NZPA