The New Zealand dollar edged a touch lower against the greenback today in a market thinned out due to the Thanksgiving Day holiday in the United States.
However, the kiwi remained strong on major cross rates so that on a trade-weighted basis it was close to a post-float high.
At 5pm, the kiwi was fetching US69.42c, little changed from US69.46c at 5pm yesterday.
The Trade-Weighted Index, measuring the kiwi against the currencies of New Zealand's five main trading partners, went as high as 72.18 today and ended on 72.18. According to Reuters data, the TWI was at its highest since the currency was floated in March 1985 although Bloomberg data had it slightly higher in June this year at 72.34.
The kiwi was at eight-year highs against sterling and the yen.
The high yielding kiwi remains attractive for investors and the higher than expected Price Index data out yesterday did nothing to dampen inflation fears. The data increased the probability of a rate rise from the current 7 per cent on December 8 and possibly another in January.
However, today's trade data gave a mixed message for currency traders. The October trade deficit of $882 million was $100 million worse than expected and saw the annual deficit blow out to a record $6.12 billion.
Economists said import growth showed New Zealanders had not yet closed their wallets and that would further encourage Reserve Bank governor Alan Bollard to hike interest rates. But the likelihood of the current account deficit hitting 9 per cent of GDP, meant the risk of owning New Zealand dollars had increased and a correction to the New Zealand dollar had to come sooner or later.
The Australian dollar closed easier at US73.69c against US73.82c yesterday while the kiwi cross rate closed at A94.22c from A94.15c.
Reuters currency rates: 5pm today 5pm Thursday
NZ dlr US69.42c US69.46c
NZ dlr/Aust dlr A94.22c A94.15c
NZ dlr/euro 0.5894 0.5880
NZ dlr/yen 82.82 82.50
NZ dlr/stg 40.32p 40.32p
NZ TWI 72.07 71.98
Australian dollar US73.69c US73.82
Euro/US dollar US1.1774 US1.1820
US dollar/yen 119.26 118.72
- NZPA
<EM>Currency:</EM> Dollar nears post float record
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