NZ currency: Dollar little changed

The New Zealand dollar remained below US77c against the greenback, unable to regain that level after reaching it for the first time in nearly eight weeks yesterday.

The kiwi was little changed during a quiet session, buying US76.77c by 5pm, up from US76.79c at 8am and having ranged between US77.04c and US76.54c overnight.

The currency was virtually unmoved by the release of a key quarterly business survey showing a dent in business sentiment after Christchurch's devastating earthquake in February.

However, the decline in the New Zealand Institute of Economic Research's quarterly survey was not as bad as some analysts had feared.

A net 5 per cent of firms experienced a decline in trading activity in the March quarter, on a seasonally adjusted basis, compared to a net 1 per cent in the December quarter. A net 11 per cent of firms were pessimistic in the three months to March, compared to a net 1 per cent in the December survey.

The kiwi inched down on the data release before recovering and hitting a session high of US76.94c by mid-afternoon.

The currency rose against the Australian dollar, to A74.35c by 5pm from A74.04c late yesterday.

Australia's central bank left its cash rate at 4.75 per cent this afternoon, compared with the Reserve Bank of New Zealand's 2.50 per cent.

The Reserve Bank of Australia's decision was not a surprise, given the lack of inflation pressure despite an economic boom.

The NZ dollar was steady at 64.74 yen, down from a 4-1/2-month high near 64.90 yen around 5.30pm yesterday.

The kiwi was also flat against other key currencies, at 0.5405 euro and 47.61 pence. Consequently, the trade weighted index was also unmoved, at 67.34.

The euro remained near a five-month high against the US dollar and an 11-month high against the yen as investors weighed up the likelihood of further gains for the single currency, with expectations of interest rate rises already priced in.

The European Central Bank was tipped to raise rates by 25 basis points later this week from a record low to fight rising inflationary pressures in the euro zone. Two more 25-basis-point rate hikes were factored in by year-end.

- NZPA