A lame attempt by the New Zealand dollar to rally ran out of puff by the close of business today.
"It tried to rally but it's given up its gains," said ANZ Investment Bank chief dealer Murray Hindley.
"I think the market still wants to sell into rallies," he said.
The kiwi finished on US64.46c, having opened up at US64.60c from US64.22c at 5pm yesterday.
However, the kiwi held much of its gain against the aussie, ending at A87.46 from A86.95c at 5pm yesterday. The Australian dollar weakened slightly to US73.82c from yesterday's US73.89c local close.
The New Zealand dollar trade-weighted index continued to lift from this week's 20-month lows. It ended at 66.26 from 66.05 yesterday.
Mr Hindley said next week will be a telling one for the kiwi, with quarterly current account and GDP data due out.
In the meantime, eyes will be on US inflation data that could determine if the US has more than a couple more interest rate hikes left in the current cycle.
The US dollar stayed near a six-week low against the euro as the market vacillated over how long the US unit can maintain its interest rate advantage over other major currencies.
It fell for a third straight session, dented by a Treasury Department report showing net capital inflows into US assets in January were less than the amount needed to finance that month's record trade deficit.
A prime lure for such inflows has been rising US rates, but the dollar was bruised this week on doubts about how much further the Federal Reserve will tighten policy, while rates climb in the euro zone and as Japan nudges closer to bumping up rates.
"The market has almost taken it for granted that the Fed is going to raise rates in March and May. That's why it's overreacting to disappointing numbers," said the chief trader at a European investment bank in Tokyo.
"The continuous trend in economic data is going to decide future Fed policy," he added.
Rates:
5pm today 5pm Wednesday
NZ dlr US64.46c US64.22c
NZ dlr/Aust dlr A87.33c A86.95c
NZ dlr/euro 0.5346 0.5342
NZ dlr/yen 75.75 75.44
NZ dlr/stg 36.90p 36.76p
NZ TWI 66.26 66.05
Australian dollar US73.82c US73.89c
Euro/US dollar US1.2061 US1.2022
US dollar/yen 117.04 117.49
- NZPA
<EM>Currency:</EM> Dollar rally peters out
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