NZ dollar little changed overnight

Photo / Dean Purcell

The New Zealand dollar was little changed, with speculation its recent rise against the Australian currency had run out of steam for now, despite the floods raging through Queensland.

Around 8am the kiwi was at US75.92c and A77.02c, with ANZ saying weakness in the Australian dollar had capped the attempts of the NZ dollar to move higher.

Today the NZ dollar's topside should again be limited against the greenback and somewhat questionable against the aussie, given the kiwi's recent appreciation, ANZ said.

With the NZ dollar having appreciated 4 per cent from the recent low against the Australian currency, many were beginning to ask whether the run was over.

The kiwi bottomed at a decade low against the aussie around A73.85c just before Christmas.

ANZ also said that moves by the NZ dollar above US76.50c remained out of reach for now, until markets fully priced in the impact of Australian climatic conditions.

It also expected the NZ dollar to again face difficulties breaking through a resistance zone of 0.5880 to 0.5920 euro, having been at 0.5864 euro at 8am.

The euro rallied broadly overnight but struggled to hold the session peaks given nervousness over a heavy schedule of debt issuance by southern European countries this week.

"Given that there are a lot of issues still unsettled with the European debt crisis, which is likely to continue for many months, there's always going to be pressure on the euro," said Ihab Salib, senior portfolio manager and head of international fixed-income at Federated Investors in Pittsburgh.

The NZ dollar did manage to ease higher against the Japanese currency, buying 63.23 yen at 8am from 63.03 at 5pm.

Support for the cross had been clearly evident overnight, with the yen weakening further against the US dollar, ANZ said.

The trade weighted index was 69.04 at 8am from 68.99 at 5pm.

- NZPA