The New Zealand dollar barely moved today despite the continued efforts of Reserve Bank Governor Alan Bollard to rein in the rampant currency.
In a hard hitting speech to the Northern Employers and Manufacturers association in Auckland today Dr Bollard again tried to talk down the New Zealand dollar, reiterating his view that it was set to fall.
"We now see the exchange rate as exceptionally high, and in some respects this is unjustifiable; in time it will fall," Dr Bollard said.
He said the consumer spending splurge, led by the bustling property market, was a major factor in the current account deficit blowout and rising inflation which led the Reserve Bank to raise the key interest rate to 7 per cent.
Dr Bollard had another dig at the real estate sector saying those who suggest continued growth was sustainable were self-serving and unhelpful.
He may have found comfort in figures out today which showed some steam seems to have gone out of the residential building sector, with a 2.5 per cent fall in new dwelling consents in September.
A seasonally-adjusted 2123 new dwellings were approved in the month, Statistics New Zealand said, compared with a revised 2178 approvals in August.
At 5pm the kiwi dollar was fetching US69.73c, from US69.69c at 8.30am today and US70.03c at 5pm yesterday.
Meanwhile the kiwi was fetching A93.91c at 5pm today from A93.87c at the same time yesterday. In a widely anticipated move the Reserve Bank of Australia today kept interest rates unchanged at 5.5 per cent.
The US dollar gained across the board as the US Federal Reserve raised interest rates for the 12th straight time -- to 4 per cent -- and signalled more rises were ahead to fend off inflation risks.
Market interest is now expected to shift to Europe as speculation mounts that the European Central Bank, which holds a policy meeting on Thursday, could raise rates from 2 per cent by the end of the year.
The following are Reuters currency rates:
5pm today 5pm (Tuesday)
NZ dlr US69.73c US70.03c
NZ dlr/Aust dlr A93.91c A93.87c
NZ dlr/euro 0.57.92 0.5847
NZ dlr/yen 81.41 81.64
NZ dlr/stg 39.48p 39.61p
NZ TWI 71.50 71.82
Australian dollar US74.27c US74.63c
Euro/US dollar US1.2034 US1.1980
US dollar/yen 116.76 116.57
- NZPA
<EM>Currency:</EM> Bollard tries to talk down kiwi
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