Kiwi slides back after brief high

File photo / Dean Purcell

The New Zealand dollar spiked at a new three-year high early yesterday against a weaker greenback, but spent the next 12 hours falling away again.

The kiwi pushed up to US81.19c about 3am, according to Reuters data, but fell away to US80.66c by 8am, similar to its level at 5pm on Monday. It bottomed out at US80.13 just before 4pm, and then clawed back to US80.47c at 5pm.

The New Zealand currency was helped to its overnight heights by the US dollar slumping to a three-year trough against major currencies.

Data had showed US manufacturing expanded faster than expected last month while another report showed construction spending rose at its fastest pace in 11 months in March.

"The reaction should reaffirm how difficult it is for the US dollar to get a sustained lift from strong growth and price numbers until such data starts to significantly pull forward US rate expectations," said Alan Ruskin, global head of G10 currency strategy at Deutsche Bank in New York. Factory good orders for March are expected to be released in the US trading today.

The NZ dollar edged up to A73.75c at 5pm as the Australian dollar extended its slide against most major currencies when the Reserve Bank of Australia decided to maintain its benchmark interest rate unchanged at 4.75 per cent, as expected.

The kiwi edged down to €0.5438 at 8am and kept falling to €0.5432 at 5pm. It edged lower to 65.52 at 8am and dropped sharply to 65.18 at 5pm.

The trade weighted index was down to 68.42 at 5pm from 68.61 at the same time on Monday.

- NZPA