The kiwi held its ground today, as the brief resurgence of the US dollar fizzled out.
At 5pm in Wellington the kiwi was buying US73.88c from US74.00c at 5pm yesterday, having traded in a US73.68c to US73.91c range.
The US dollar gained against most major currencies in last night's offshore session, as investors took the view that Friday's sell-off on poor US trade data may have been overdone. But BNZ currency strategist Sue Trinh said that improved sentiment died down today.
"There's going to be a lot of tension surrounding the US data release tonight which is the US Treasury's capital flow data, and whether that will potentially put another nail in the coffin of the US dollar or not," she said.
She said the market seemed to be quite focused on the structural frailties of the US dollar, rather than the upside of the Federal Reserve possibly hiking interest rates next week.
Domestically, Ms Trinh said the kiwi was being underpinned by the recent flow of economic data, including buoyant retail sales and job ads, reinforced upside risks for New Zealand interest rates.
She said there were also rumours of more eurokiwo and uridashi issuances in the pipeline as well, which would be beneficial to the kiwi.
Uridashis are bonds denominated in currencies other than yen and sold to Japanese retail investors, who are attracted by the high yields. Eurokiwis are eurobonds denominated in New Zealand dollars.
At 5pm today the greenback was at 104.71 yen (104.44 at 5pm yesterday), while the euro was buying $1.3365 ($1.3450), and the aussie was trading at US78.89c (US79.23c).
Meanwhile, on the crosses the kiwi was at A93.65c (A93.40c), 0.5528 euro (0.5502), 38.57 British pence (38.48), 77.37 yen (77.28), and 0.8568 Swiss francs (0.8520).
The trade-weighted index was at 71.17 (71.06), and the monetary conditions index was at plus 1109 (1100).
On the money markets, 90-day bank bill yields were at 7.08 per cent (7.06), July 2009 bonds were at 6.32 per cent (6.34), and April 2015s were at 6.18 per cent (6.21).
- NZPA
<EM>Currency:</EM> Kiwi holds ground as market waits on US data
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