Dollar gains little ground on greenback

The New Zealand dollar bounced back a little today, but failed to make much headway after hitting 2-1/2 month lows against the US dollar overnight.

By 5pm, the kiwi was at US69.55c, down from US70.11c late yesterday afternoon, but stronger than the US69.14c level reached overnight.

The kiwi also gained a little ground against the Australian dollar this afternoon after the Reserve Bank of Australia indicated it had finished with interest rate rises for now.

The RBA said in minutes to its May 4 meeting, when it lifted the key rate by 25 basis points to 4.50 per cent, that rates were back at average levels with the latest rise, its sixth in seven meetings.

By 5pm, the kiwi was at A79.76c from A79.92c late yesterday afternoon. The currency was also weaker against the euro, yen and pence, pushing the trade weighted index (TWI) down to 67.18 from 67.71.

The TWI has fallen from its nearly two-year high of 68.91 earlier this month.

Investors have turned away from assets considered risky, such as the New Zealand dollar, and the euro has been trading near four-year lows as concerns arose about the fiscal woes in Europe. A US senate vote opposing IMF bailouts for countries unlikely to repay them also hit the euro.

- NZPA