Currency: Kiwi consolidates above US71c

The New Zealand dollar maintained its footing above US71c today, after gaining on a faltering greenback over the weekend.

At 5pm the kiwi was at a three-week closing high of US71.43c, up from US70.52c at 5pm on Friday.

The US dollar was hit during Friday night's offshore session by softer-than-expected US consumer confidence data and an online report by BusinessWeek magazine that suggested Federal Reserve chairman Alan Greenspan did not favour a more aggressive rate policy.

The Federal Reserve is set to meet on February 1-2 and a 25 basis point rate rise had been widely tipped.

At 5pm today the US dollar was at A77.00c (A75.84c), 102.90 yen (103.49), and the euro was at US$1.3050 (US$1.2953).

Meanwhile the Reserve Bank of New Zealand (RBNZ) is set to meet on Thursday. RBNZ governor Alan Bollard is expected to leave the official cash rate unchanged at 6.5 per cent, but all eyes will be on the accompanying statement for signs of future movements.

Another upcoming market moving event is a Group of Seven (G7) meeting on February 4-5, which will discuss exchange rate flexibility. Some dealers have expressed concern that the meeting will turn up the heat on China to revalue its currency. It is widely thought that a higher yuan, now virtually pegged at 8.28 per US dollar, would trigger a rally in other Asian currencies.

At 5pm the New Zealand dollar trade-weighted index was at 69.42 (68.94) and the monetary conditions index was at plus 957 (925).

On its crosses, the kiwi was fetching A92.74c (A92.95c), 0.5473 euro (0.5444), 38.06 British pence (37.73), 73.50 yen (72.98) and 0.8468 Swiss francs (0.8412).

On the money markets, 90-day bank bill yields were unchanged at 6.80 per cent, November 2006 bond yields were unchanged at 6.31 per cent, July 2009s were also static at 6.06 per cent and April 2015s were at 5.98 per cent (5.95).

- NZPA