NZ dollar little changed

The New Zealand dollar spent a quiet session trading in a narrow range but dealers said economic reports this week have put a floor under the currency.

By 5pm the NZ dollar was buying US72.12c from US72.33c at 8am and US72.12c at 5pm yesterday.

Mike Jones, currency strategist at BNZ, said the NZ dollar was treading water after the strong National Bank of New Zealand business outlook survey yesterday, which registered strength particularly in the construction sector.

The report would probably leave the Reserve Bank of New Zealand seeing upside risk to its growth expectation for the third quarter of 2009, Bernard Doyle of Goldman Sachs JBWere said.

The Australian dollar rose to a 14-month high today after being boosted yesterday by better than expected retail sales data, which suggested interest rates will rise sooner than previously thought.

As a consequence the NZ dollar eased to A81.84c from A81.99c at 5pm yesterday.

Investors also focused on the release of China's official purchasing managers' index (PMI) and US non-farm payroll data later this week. The PMI rose to 54.3 from 54.0 in August.

The US dollar was on the defensive today on the back of a weaker than expected US midwest activity index.

The NZ dollar was at 0.4932 euro, unchanged from yesterday and at 64.90 yen from 64.73.

Despite debate about the sustainability of sterling weakness, the NZ dollar rose to 45.18p from 45.00p yesterday.

The trade weighted index was 65.58 at 5pm from 65.57 at the same time yesterday.

- NZPA