KEY POINTS:
The New Zealand dollar today eased against a recovering US dollar but rose against the Aussie dollar.
The kiwi retreated from a one week high against the greenback hit at 7.45pm yesterday when it touched US76.76c. It closed on US76.15c, virtually unchanged from its opening.
The greenback rose in quiet trade against most major currencies overnight as investors reassessed risk and bet Friday's sell-off on a US payrolls report was overdone.
September jobs growth was the best since May and eased concern about an imminent US recession, but some dealers sold the greenback on concern the economy is not growing fast enough to prevent the Federal Reserve from cutting US interest rates further.
The overnight gains came as investors decided the jobs report indicated some vigour in the US economy.
Adding to US dollar strength was concern that the Group of Seven nations may address greenback weakness at their upcoming meeting, which could leave some investors who had been betting on the dollar's continued decline caught short.
Economists here expect the Reserve Bank to remain wary of inflation risks following a business confidence data showing confidence mired at low levels but pricing intentions remaining high.
Seasonally adjusted, a net 30 per cent of firms expected the general business situation to deteriorate in the next six months. That compared to a net balance of 29 per cent in the June quarter and a net 9 per cent in the March survey.
ASB treasury economist Daniel Wills said the results reinforced that inflation pressures were "very slow" to ease.
If businesses experienced any reduction in cost pressures in coming months they would likely divert it to their bottom line, which had been under pressure, rather than rein in selling prices, he said.
Despite the strong recent performance by the Australian dollar, which yesterday hit a 23-year high against the greenback, the kiwi rose on the cross to A85.38c from A84.97c.
The trade-weighted index eased to 71.83 from 71.88.
Reuters currency rates
(4.30pm today 5pm yesterday)
NZ dlr/US dlr US76.15c US76.54c
NZ dlr/Aust dlr A85.38c A84.97c
NZ dlr/euro 0.5431 0.5416
NZ dlr/yen 89.24 89.66
NZ dlr/stg 37.40p 37.49p
NZ TWI 71.83 71.88
Australian dollar US89.20c US90.10c
Euro/US dollar 1.4018 1.4135
US dollar/yen 117.24 117.12
- NZPA
