NZ dollar trades in range at lower level

The New Zealand dollar traded in a fairly narrow range today after falling away during the weekend on worries about the global outlook.

By 5pm the NZ dollar was at US70.55c, little changed from the US70.83c at 8am, which was down from US71.52c at 5pm on Friday.

BNZ senior strategist Danica Hampton said that after performing strongly for much of last week, the NZ dollar hit a stumbling block on Friday night.

A surprise tightening by the Bank of India raised fears that central banks from other emerging economies may soon follow suit, Ms Hampton said.

The Bank of India decision took a toll on commodity prices, equities and risk appetite.

Westpac said India's rate hike would have markets concerned about more tightening in emerging Asian countries.

Last Wednesday's high of US71.80c was likely to be a cap to any moves higher, while support existed at US70c and US68c.

Investors would be comparing Thursday's fourth quarter gross domestic product data with the Reserve Bank of New Zealand's expectation of a 0.6 per cent rise and the market consensus of a 0.8 per cent rise. Fourth quarter current account data was also due on Wednesday.

The NZ dollar fell to 0.5220 euro at 5pm from 0.5231 euro at 8am and 0.5248 at 5pm on Friday, and was down to 63.83 yen from 64.68.

Against the Australian dollar, the NZ dollar was at A77.20c at 5pm from A77.38c at the local open and A77.56c at Friday's close.

The trade weighted index was 65.43 at 5pm from 65.93 at the same time on Friday.

- NZPA