Trading in the New Zealand dollar was reasonably calm yesterday after an extremely whippy session on overseas markets overnight.
Bank of New Zealand currency strategist Sue Trinh said while there was "a little bit of consolidation" taking place on a "quietish" day, the kiwi did respond to events affecting its Australian counterpart.
The Australian dollar broke above US67c yesterday for the first time since July 1999 after the Reserve Bank of Australia (RBA) indicated it was not concerned by the local dollar's strength this year.
Testifying to the Federal Parliament's House of Representatives, RBA Governor Ian Macfarlane said the Aussie's move was not excessive.
The aussie rallied to US67.10c from around US66.60c, but then retreated below the big figure when the central banker said the outlook for interest rates were either steady or down.
Ms Trinh said the kiwi followed these movements.
Opening on its low of US57.70c it had a slow climb up to a high of US58.18c on the back of the surging aussie.
"This was at the time when the RBA Governor McFarlane was giving his testimony to the parliamentary committee and the initial headlines on that statement were quite bullish. The aussie picked up and dragged kiwi along with it." Ms Trinh said.
"But then other comments that came out as he was speaking started to become less obviously bullish so the kiwi subsequently has now pretty much settled down to the familiar territory of around about the US58c figure."
By 5pm the kiwi was at US58.06c from US58.17c on Thursday night, while the aussie closed at US66.78c (US66.27c).
Ms Trinh said a big night was in store last night as US payrolls figures were to be released which would affect the greenback, the key recent influence on the kiwi.
Ms Trinh expected the kiwi to trade in range of US57.70c to US58.25c last night.
In Wellington at 5pm the euro was at US$1.1853 from US$1.1655 on Thursday.
The US dollar was buying 117.70 yen (118.58).
On the crosses at 5pm the kiwi was buying A86.90c (A87.79c on Thursday), 68.32 yen (68.99), 0.3489 pence (0.3569), 0.7561 Swiss francs (0.7663), and 0.4895 euro (0.4980).
The monetary conditions index was at plus 163 (213), the trade-weighted index was at 61.08 (61.69) and 90-day bank bill yields were at 5.27 per cent (5.25).
On the debt market, February 2005 yields were at 4.83 per cent (4.91), November 2006s were at 4.87 per cent (4.98), and November 2011s were at 5.27 per cent (5.34).
- NZPA
<Currency:</I> NZ dollar rides Aussie on quietish day
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