NZ dollar consolidates

The New Zealand dollar consolidated around US75c today as investors took profits in the US dollar market ahead of a US payrolls report tonight.

The NZ dollar soared to just below US76c on Thursday night but then it fell when the US dollar rose. By 5pm it was at US75.27c, up from US74.99c at 8am but below its level of US75.39c at 5pm yesterday.

The US dollar rose as traders squared up positions ahead of the US data. The market expects a flat payroll report but any sign of weakness could spur the US Federal Reserve into action. Expectations that the Federal Reserve will boost US money supply have earlier weakened the US dollar.

The yen has risen to a 15-year high against the US dollar and investors are looking to see if the Bank of Japan intervenes to knock the yen lower.

The Australian dollar has also been at a 27-year high against the US currency, gaining an extra boost from an Australian jobs market that again exceeded expectations this week.

It was little changed at US98.36c at 5pm from US98.39c yesterday. Reserve Bank of Australia deputy governor Ric Battellino was reported today saying it would be a mistake for Australia to try to manage the Australian dollar.

The NZ dollar was weak against the Australian dollar yesterday and was at A76.51c at 5pm today from A76.42c at 8am from A76.60c at 5pm yesterday.

The New Zealand Manufacturers and Exporters Association (NZMEA) said today that New Zealand must solve its own currency issues.

"The situation we are facing in terms of currency now is really no different to 2007. Then we had high interest rates while the United States and Europe ran looser monetary policy, creating a gap between the two. Now we have lower rates and the United States and Britain are printing money; the gap remains the same," said NZMEA chief executive John Walley.

"To suggest that the Government is simply going to ignore the single biggest problem facing the economy is an untenable position for our exporters."

The NZ dollar was at 0.5395 euro at 5pm from 0.5416 at the same time yesterday. It was at 61.96 yen from 62.49.

The trade weighted index dropped to 66.89 at 5pm from 67.11 yesterday.

- NZPA