NZ dollar mixed in a narrow range

The New Zealand dollar spent a mixed session trading in a narrow range and dealers continue to say the currency is reflecting movements in the euro and Australian dollar rather than economic fundamentals.

By 5pm today the NZ dollar was US66.84c from US66.31c at 8am and US66.57c at 5pm yesterday.

"We have traded in a pretty narrow range. Initially we were soft in the morning on the back of the Dow finishing in negative territory," one dealer said.

"Basically, we have just followed the euro and aussie dollar today. There is a bit of interest out there but people are still worried about the situation in Europe."

BNZ strategist Mike Jones that while there was pessimism about Europe's sovereign debt woes, on Wednesday night data reinforced optimism about a US recovery, while the OECD revised up its forecasts for global growth in 2010 and 2011.

Investors have dipped their toes back into risk-sensitive currencies such as the NZ dollar but the highs have not lasted long.

During the day in Asia the euro was weak on reports that China was reviewing its euro zone debt holdings but it rallied after a Chinese official said China's foreign exchange diversification would not change.

Capital expenditure data in Australia showed spending in the first quarter was weaker than investors were expecting.

The NZ dollar eased to A80.50c at 5pm from A80.82c at the same time yesterday. It was at 60.27 yen from 60.02 at 5pm yesterday and at 0.5450 euro from 0.5416 euro.

The trade weighted index was 65.12 at 5pm from 64.96 yesterday.

- NZPA