NZ dollar holds ground

The New Zealand dollar recovered slightly after hitting a five-month low against the Australian dollar in early trading.

By 5pm, the kiwi was at A76.52c, up from its low of about A76.30c, but still below its level last night of A76.64c.

The Australian dollar has been boosted by the outlook of rising interest rates across the Tasman, where economic growth is more marked than in New Zealand.

The Reserve Bank of Australia meets next Tuesday, and is expected to increase its key rate to 4.75 per cent from the current 4.5 per cent.

In contrast, New Zealand's official cash rate of 3 per cent is likely to remain on hold for some time, reflecting weakness in the economy.

The kiwi was little changed against the greenback at US73.46c, from US73.41c late yesterday afternoon.

As the currency was also relatively flat against the euro, yen and sterling, the trade weighted index was virtually unchanged at 66.50 from yesterday's 66.49.

The aussie managed to make up ground against the greenback, however, rising to US96.02c from US95.75c yesterday. It had earlier hit a more than two-year high of US96.44c against the US dollar, which in turn had gained a little ground after a report the US Federal Reserve would change tack in its bond buying progamme.

- NZPA