Disagreement over dollar's direction

The New Zealand dollar is ripe for a turn - although traders' disagree markedly over which way they could go.

At 5pm the NZ dollar was buying US70.73c, easing from US70.88c at the 8am today and a 13-month high of US71.55c on Thursday.

Westpac senior market strategist Imre Speizer reported a lacklustre day on the currency market, with tension between the technical and fundamental schools of thought .

"We know, technically, a correction is well and truly overdue. But fundamentally, things back risk going much, much higher," Mr Speizer said.

"Risk markets have paused. It's basically `do we take a run up while we see if we can take it a leg higher', or do we do the much-awaited technical correction?

"The markets are ripe for a turn," he said.

Positive figures on immigration and credit card spending released today had some impact and pointed to positive retail figures, with New Zealand possibly even coming out of recession, he said.

However, currency traders were looking towards the US Fed meeting on Wednesday night which could back a return to the greenback, he said.

With no US data to lend direction, currencies were taking cues from equity and commodity markets. World equities came under pressure after scaling an 11-month peak as investors took stock of recent hefty gains, although Wall Street ended higher on Friday (local time) in a choppy session.

Data out this week would be important in gauging how quickly the New Zealand economy was recovering, with figures for migration, balance of payments, consumer confidence and gross domestic product.

The kiwi eased against the Australian dollar to A81.69c from A81.72c this morning, though still higher than A81.51c at 5pm on Friday.

Against the euro, the dollar traded at 0.4817, down slightly from 0.4824 at 5pm on Friday, and eased against the yen to 64.77 from Friday's 64.78.

The kiwi dipped to 43.55p against the sterling from 43.60p this morning and 43.32 on Friday night.

The trade weighted index fell to 64.57 from 64.65 on Friday night.

- NZPA