KEY POINTS:
The New Zealand dollar held steady today after it firmed a tad overnight in quiet trading.
At 5pm, it was buying US77.47c from US77.22c at 5pm, having peaked overnight above US77.70c.
ANZ bank said the NZ dollar was dragged reluctantly higher by the strength of its Australian counterpart.
Data out today confirmed the economy was in retreat. Electronic card transactions fell 0.3 per cent in April while overall economic activity fell 0.6 per cent in the March quarter, according to a regional survey.
Against the euro, the NZ dollar fell to 0.4943 from 0.4979 at yesterday's local close as traders bet on the euro zone having to increase rates.
Traders will view tomorrow's budget with only mild interest with around $2 billion of tax cuts already factored in. A more stimulatory than expected budget is likely to boost the kiwi with traders likely to assume interest rates will have to stay high for longer.
The greenback's losses against a generally firmer euro were capped by inflation data that muddied the US interest rate outlook.
Concern about further credit-related losses and their impact on financial markets also sent the greenback tumbling against the low-yielding yen and Swiss franc, while a record high oil price added to fears about surging price pressures.
The Australian dollar hit a 24-year high at US96.17c against the greenback after minutes from the Australian central bank's last policy meeting revealed the board discussed raising interest rates, suggesting future hikes may be in store.
The NZ dollar has moved generally down against the aussie from above A88c in late March, but it made some small gains overnight to be at A80.79c by 5pm from A80.57c at 5pm yesterday.
Against the yen, the kiwi slipped to 79.96 from 80.57, while the trade weighted index was 68.75 from 68.87.
Currency rates:
NZ dlr/US dlr US77.47c US77.22c
NZ dlr/Aust dlr A80.79c A80.57c
NZ dlr/euro 0.4943 0.4979
NZ dlr/yen 79.96 80.45
NZ dlr/stg 39.35p 39.55p
NZ TWI 68.75 68.87
Australian dollar US95.94c US95.85c
Euro/US dollar 1.5665 1.5517
US dollar/yen 103.20 104.17
- NZPA
