The New Zealand dollar closed nearly half a US cent stronger today as traders reassessed their US dollar outlook in the face of weak economic data.
The kiwi close at US69.50, against its US69.02c close yesterday.
The Australian dollar made even better gains, rising one US cent to US75.50c from its close here yesterday.
The US dollar was weak across the board. It fell to two-week lows against the euro after surprise weakness in US Midwest business activity raised prospects that the Federal Reserve could halt its tightening sooner than thought.
The Chicago purchasing management index for August was 49.2, sharply below market forecasts of 61.5 and the lowest reading since April 2003. A figure below denotes a contraction.
The US dollar has rebounded for most of 2005 on expectations the Federal Reserve will continue its rate hiking campaign, boosting the allure of some short-term dollar denominated assets.
Analysts are now re-examining their bullish view on the US currency and extent of future rate increases.
In Wellington, the euro closed on US$1.2332 compared to US$1.2223 yesterday, while the greenback declined to 110.81 yen from 111.29.
On its crosses, the kiwi was buying A92.09c (A92.32c), 0.5638 euros (0.5648), 0.8720 Swiss francs (0.8753), 38.58 British pence (38.63) and 77.03 yen (76.79).
The New Zealand dollar trade-weighted index ended on 69.88 (69.74) and the monetary conditions index on 1014 (1005).
On the money market, 90-day bank bill yields closed on 7.04 per cent (7.05). July 2009 bond yields closed on 5.61 per cent (5.63), while the April 2015 yields fell sharply to 5.61 per cent (5.70).
- NZPA
<EM>Currency:</EM> Kiwi closes higher as US dollar weakens
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