NZ dollar eases as US dollar rallies

The New Zealand dollar eased today mostly because the US dollar rose.

The kiwi was worth US75.17c at 5pm from US75.62c at 8am and US75.70c at 5pm on Friday. It had traded as high as US76.15c during the weekend.

Statistics New Zealand said that higher food prices were a key factor in a 1.1 per cent rise in the consumers price index in the September quarter, although the annual rate fell to its lowest level since March 2004 at 1.5 per cent.

Mike Jones, currency strategist at BNZ, said the NZ dollar market took the inflation data in its stride even though it was slightly higher than expected.

"The data paled in comparison to a broad-based bounce in US dollar which was the theme of day," he said.

Investors were disappointed that US Federal Reserve governor Ben Bernanke did not provide any detail of a quantitative easing in a speech on Friday. The US dollar has been weak on expectations of such an easing.

Mr Jones said the lack of an "all guns blazing" approach caused the US dollar to rise against a range of currencies.

The Australian dollar briefly achieved parity against the US dollar during the weekend but then dived away as investors considered the possibility recent declines of the United States currency were overdone.

It was worth US98.47c at 5pm, down from US99.12c at the same time on Friday.

By 5pm today the NZ dollar was buying 61.11 yen at 5pm from 61.52 yen at 8am and 61.62 yen on Friday. It was at A76.30c from A76.34c at 5pm on Friday, and 0.5412 euro from 0.5392.

The trade weighted index was down to 66.75 at 5pm from 66.90 at 5pm on Friday.

Analysts are now eyeing a meeting of the Fed on November 2-3.

- NZPA