KEY POINTS:
The New Zealand dollar's test of higher levels was today interrupted by a resurgent US dollar and a reminder of how indebted New Zealand is in current account data.
From around US67.60c shortly before news of a record annual current account deficit of $14.97 billion in the June quarter the currency fell to end at US67.35 by 5pm.
Economists estimated the annual deficit to be 8.3 per cent of gross domestic product and they don't expect it to shrink any time soon. The deficit heightened the issue of the need for funding offshore.
The kiwi reached around US67.90c late last night but today the US dollar was firmer after US Treasury Secretary Henry Paulson said he and congressional leaders were working on a broad plan to "address systemic risk" in US capital markets.
In New Zealand the Reserve Bank tweaked the tools it has to provide liquidity to make the system more flexible and said it stands ready to support liquidity in the banking system.
The bank did not cut interest rates early as some economists had speculated was possible.
Against the Australian dollar, the kiwi reached A83.26c at the local close from A83.88c at 5pm yesterday.
The NZ dollar was at 0.4751 from 0.4631 at yesterday's local close.
Against the volatile yen, the kiwi rose to 72.06 from 69.40. The trade weighted index was 64.15 at 5pm from 63.07 at 5pm.
Currency rates:
NZ dlr/US dlr US67.35c US66.46c
NZ dlr/Aust dlr A83.26c A83.88c
NZ dlr/euro 0.4751 0.4631
NZ dlr/yen 72.06 69.40
NZ dlr/stg 37.38p 36.49p
NZ TWI 64.15 63.07
Australian dollar US80.92c US79.21c
Euro/US dollar 1.4168 1.4353
US dollar/yen 107.04 104.44
- NZPA
