KEY POINTS:
The New Zealand dollar ended the week holding near record levels against the greenback but continuing to slip against other major currencies.
Having topped US82c on Wednesday night for the first time since being floated 23 years ago, the kiwi dropped as low as US81.08c overnight before recovering to close unchanged from yesterday at US81.52c.
ANZ bank said the NZ dollar had failed to join the "weak USD party" and instead barely recovered from overnight lows. More nerves on the Japanese sharemarket today inhibited gains for the kiwi with investors shunning risk.
While the kiwi slipped from its peak against the greenback, the US currency itself plunged to a record low against a basket of currencies for a third straight day.
Federal Reserve chairman Ben Bernanke did nothing in testimony to the US Senate to dispel expectations that US interest rates are headed lower.
"Bernanke has yet to make a remark that shows open concern about dollar weakness," said Alan Ruskin, chief international strategist at RBS Greenwich Capital.
Allowing it to drop "is a convenient alternative transmission for the Fed to exert some expansionary influence".
"The only way forward for the dollar is down, as recent ranges have been broken completely," said a senior trader at a European bank.
Against the euro, yen and Australian dollar, the kiwi has been heading down since hitting recent highs on Tuesday. Dealers said the weak growth outlook for New Zealand was pegging the kiwi down.
By the week's end, it was down to 0.5370 euro having reached a six-month high above 0.5490 earlier in the week.
Against the yen the NZ dollar was down to 85.35 from a two-month high above 88 yen, and against the aussie the kiwi was down to A86.12c from a two-week high above A87.80c.
The trade weighted index fell to 73.24 from 73.61 at 5pm yesterday.
Next week, the focus will turn to the Reserve Bank's Quarterly Monetary Policy statement. No change in rates is expected and governor Alan Bollard is picked to maintain a hawkish tone to his commentary.
Currency rates:
NZ dlr/US dlr US81.52c US81.53c
NZ dlr/Aust dlr A86.12c A86.44c
NZ dlr/euro 0.5370 0.5398
NZ dlr/yen 85.35 86.75
NZ dlr/stg 40.99p 41.12p
NZ TWI 73.24 73.61
Australian dollar US94.61 US94.41
Euro/US dollar 1.5176 1.5108
US dollar/yen 104.72 106.29
- NZPA
