The New Zealand dollar gave up most of its overnight gains today as nervousness about kiwi quarterly economic data gripped the market.
The kiwi had opened mildly stronger against its United States counterpart on news that China was ready and waiting to revalue its yuan, dealers said.
But when the Asian market opened for business, the kiwi was sold on profit taking and it closed near its session low on US71.52c.
It had opened at US71.74c compared with yesterday's close of US71.45c.
The local market is waiting for March quarter current account data due tomorrow and GDP data on Friday.
Westpac currency strategist Johnathan Bayley said the market was becoming more sensitive to the current account deficit.
"Any number worse than the consensus will see the kiwi sold," he said.
Economists are expecting the quarterly deficit to be $1 billion and the annual deficit to be $10 billion, or 6.7 per cent of GDP.
Mr Bayley said Friday's growth figures could be even more important, revealing how sensitive the economy will be to policy risk.
Major markets were focused on the possibility of yuan revaluation. The euro closed here at US$1.2168 (US$1.2140) while the dollar finished on 108.53 yen (109.35). The Australian dollar closed on US77.76c (US77.47c).
The kiwi trade-weighted index ended on 71.52 (71.54), and the monetary conditions index at plus 1126 (1134).
On the crosses, the kiwi was buying A91.93c (A92.20c), 0.5880 euro (0.5885), 77.65 yen (78.16), 39.15 pence (39.18) and 0.9070 (0.90890).
On the money markets, 90-day bank bill yields closed unchanged on 7.05 per cent (7.05).
Bond yields fell following the downturn in consumer confidence in a survey out today and Berl's latest economic forecasts suggesting the prospect of a hard economic landing. July 2009 bonds closed on 5.95 per cent (5.97) and April 2015s on 5.79 per cent (5.81).
- NZPA
<EM>Currency:</EM> Dollar gives up gains
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