Overseas demand is still high for the kiwi, which has bounced back from Monday's intervention. Photo / Reuters
The Reserve Bank's currency intervention has already lost its shock value, Westpac currency strategist Michael Gordon said yesterday as the New Zealand dollar climbed above where it had been when the bank intervened on Monday.
The kiwi opened at US75.40c yesterday and climbed slowly throughout the day to
close at US75.54c at 5pm - a touch above the US75.50c it was trading at on Monday morning when the central bank tried to lower the currency by selling.
The New Zealand dollar closed at 93.42, eclipsing the 19-year high of 93.30 it reached on Monday.
The trade weighted index was unchanged at 73.60 - above Monday morning's 73.50.
Gordon said although there had been no confirmation from the Reserve Bank that it did intervene on Monday, "it's pretty widely accepted that they were in [the market]".
"It sounds like it was a smaller amount dealt and so obviously it had a smaller impact on the currency.
"In terms of the wash-up, perhaps people are getting a little bit cynical about it, having had a little time to think about it. The kiwi's being well supported in spite of intervention."
On Monday last week the Reserve Bank intervened in the currency for the first time since the New Zealand dollar was floated in 1985.
