NZ dollar slips, easing out of holiday highs

File photo / NZH

The New Zealand dollar contracted a little more today from its November high against the United States dollar, despite having performed strongly over the New Year holiday in thin trade.

The NZ dollar was down to US76.77c at 8am, having peaked around US78.10c early on Saturday, and fell further to US76.42c at 5pm

Against the aussie the kiwi continued to bobble along in the narrow range above A75.90c which it has occupied since peaking around A76.50c early on Saturday. At 8am the kiwi was at A76.32c and it finished at A76.14c .

BNZ currency strategist Mike Jones said the NZ dollar's strong performance since Christmas Eve reflected a surge in commodity prices -- including today's lift in the online contracts for milkpowder at Fonterra's internet auction today.

The holiday buoyancy saw the kiwi top 50 pence against the British currency for the first time since June 1979, though it finished the day at 49.07p.

Mr Jones noted the holiday exchange rates were likely helped by year-end positioning and "whippy" holiday-thinned markets.

The Australian dollar also fell fractionally against the greenback, retreating from a 28-year peak around US$1.0257 set early on Saturday to US$1.0037c at 5pm.

Traders said funds sold aussie for euros, taking profit on long aussie positions taken in the run-up to the end of 2010.

Early on Monday, the NZ dollar also reached a 3-1/2-year peak against the European currency around 0.5850 euro, since then has dropped fell away to finished at 0.57.42 today.

Early yesterday, the NZ dollar reached 63.43 yen, its highest level in almost a month, but eased to 62.88 yen by 8am today and finished at 62.76 yen, when the trade weighted index at 5pm was 68.60.

Traders said that volatility in major currencies was still elevated, suggesting investors in the options market remained nervous about global growth prospects.

- NZPA