Currency: Dollar drifts after rise against US

The New Zealand dollar drifted during its domestic session after reaching its highest level in nearly a week on Tuesday night.

By 5pm the NZ dollar was buying US60.04c from US60.18c at 8am and US60.60c overnight. It was US59.71c at 5pm yesterday.

"The strength was in London overnight and we've actually retraced some of that today," said ANZ Bank chief foreign exchange dealer Murray Hindley.

"There has been a little bit of light profit-taking after the move in the last 24 hours," he said.

- REUTERS

reported that the NZ dollar was supported by a planned $419 million Uridashi bond. These are bonds issued in Japan denominated in New Zealand dollars.

BNZ Capital currency strategist Danica Hampton said the appetite for investment in risk sensitive currencies could be seen by rekindled interest in NZ dollar Uridashi bonds.

ANZ said some correction for the NZ dollar should not come as a surprise, given the relative ease of the move higher.

"Consider much of the work that the NZ dollar is undertaking to be base building for a move higher," ANZ said.

Against the Australian dollar, the NZ dollar was A77.80c from A77.87c yesterday.

The NZ dollar edged up to 0.4410 euro from 0.4402 yesterday, and rose to 57.50 yen from 57.57. The trade weighted index was 57.87 from 57.78.

- NZPA