NZ dollar hovers below US74c

The New Zealand dollar consolidated today after touching its highest level in a week - and second highest in eight months - against a broadly lower greenback.

The US dollar was weakened by a decline in consumer confidence in the United States, increasing expectations the Federal Reserve will print money to buy assets.

The NZ dollar was worth US73.89c at 5pm from US73.92c at 8am and US73.46c at 5pm yesterday. It edged above US74c for a short time before 7am but spent its domestic session mostly in a range between US73.94c and US73.80c.

"It is quiet at the moment with no real fresh news out," said Murray Hindley, chief currency dealer at ANZ. He said Asian equity markets were weak and New Zealand trade data was in line with market expectations.

Statistics New Zealand said exports were up 15 per cent, or $405 million, in August from a year earlier to $3.2 billion, led by higher prices for dairy products. Imports last month were up 3.6 per cent, or $126 million, to $3.6 billion, leaving a trade deficit in August of $437 million, or 14 per cent of the value of exports.

For the year ended August the annual trade surplus was the highest since March 2002.

The NZ dollar has gained 5.8 per cent since the beginning of September but has not been able to match an 8.5 per cent rise in the Australian dollar, Reuters reported.

The Australian dollar hovered near a two-year high today due to the weak US dollar.

However, the NZ dollar is trading in a narrow range against the Australian dollar and was at A76.33c at 5pm from A76.52c at the same time yesterday.

It was at 0.5436 euro from 0.5459 euro at the same time yesterday.

The NZ dollar was at 61.86 yen at 5pm from 61.88 yesterday, while the trade weighted index rose slightly to 66.58 from 66.50.

- NZPA