KEY POINTS:
Sentiment remained negative on the New Zealand dollar today, as it remained near six-week lows against the US dollar and six-month lows against the euro.
The decision by the Reserve Bank of Australia to keep interest rates steady at 7.25 per cent late this afternoon boosted the kiwi slightly on the cross-rate against the Australian dollar.
However, the kiwi failed to make up ground lost overnight amid heavy selling after the release of the National Bank's business outlook, which showed firms' own activity falling to the lowest levels since 1991.
By 5pm, the kiwi was at US78.63c from US79.29c late yesterday, having been as low as US78.38c earlier.
Against the Aussie, the kiwi was at A86.26c from yesterday's A86.47c, and earlier 2-1/2 week lows of A85.75c.
The kiwi was also lower against the euro, yen and sterling, easing to 69.94 on the trade weighted index from 70.40.
"I think the National Bank Business Confidence survey yesterday really hammered home the idea that New Zealand growth is slowing and that people have come around to the idea that perhaps the RBNZ will actually cut rates eventually," said Bank of New Zealand currency strategist Danica Hampton.
Market participants had been given the green light to sell kiwi, particularly against the Aussie as the outlook for growth in Australia was brighter.
Today, the Westpac McDermott Miller employment confidence index, which measures confidence about employment, recorded its biggest monthly fall but remained positive in March.
Markets were awaiting non-farm payrolls data on Friday, and US manufacturing data tonight, both of which had the potential to provide some bad news and support the kiwi.
The kiwi had traded with a range in the last fortnight of US79-82c, and that was likely to lower to US78c-81c, Ms Hampton said.
The US dollar edged up against the yen today as Asian stocks climbed, though the rise was capped by investor wariness before testimony from the Federal Reserve chief and a raft of US economic data later this week.
Reuters currency rates:
NZ dlr/US dlr US78.63c US79.29c
NZ dlr/Aust dlr A86.26c A86.47c
NZ dlr/euro 0.4984 0.5018
NZ dlr/yen 78.52 79.25
NZ dlr/stg 39.64p 39.75p
NZ TWI 69.94 70.40
Australian dollar US91.14c US91.65c
Euro/US dollar 1.5776 1.5807
US dollar/yen 99.86 99.91
- NZPA
