Dollar eases after near eight week high

The New Zealand dollar came under pressure in its domestic session today after reaching a near eight week high on Monday night.

There was little reaction to the main item on the economic calendar this week - the quarterly survey of business opinion (QSBO) by the New Zealand Institute of Economic Research. Investors took more note of a fall in the Australian dollar on weak economic data and comments about major currencies by a Chinese official.

The NZ dollar was at US73.99c at 5pm, down from US74.28c at 8am and US74.02c at 5pm yesterday. It had risen to around US74.37c on Monday night, the strongest since November 19.

Mike Jones, a currency strategist at BNZ, said the QSBO report was mixed and there was little reaction to it. If anything, the NZ dollar should have moved higher in response to the report.

"It had very little impact on currency markets, in part because there were some very mixed messages and perhaps markets were uncertain how to interpret it," Mr Jones said.

The Australian dollar fell on weaker than expected home loan data in Australia. The number of home loans in November dropped 5.6 per cent from October, more than the small decline the market was expecting.

The Australian dollar was US92.60c at 5pm from US93.14c at 5pm yesterday.

"We sold off in line with the aussie data," Mr Jones said.

The NZ dollar rose to A79.88c at 5pm from A79.45c at the same time yesterday.

Also, a Chinese official said the US dollar has hit bottom, which put pressure on a range of currencies, including the NZ dollar.

The NZ dollar rose to 0.5111 euro at 5pm from 0.5097 yesterday and was little changed at 68.26 yen. The trade weighted index was 66.96 at 5pm from 66.86 yesterday.

- NZPA