The kiwi dollar partially recovered today after losing more than US1c over the Anzac holiday.
It closed at US62.89c, having opening at US62.38c from US63.50c at Monday's close.
The kiwi's fall came despite the US dollar slipping to seven-month lows against the euro after comments from European Central Bank (ECB) officials left open the possibility that euro zone interest rates could meet or even exceed market expectations.
The local market is awaiting tomorrow's six-weekly review of the Official Cash Rate by the Reserve Bank. Any change would be a shock to the markets and economists are anticipating another hawkish commentary to the effect that punters should not hold out for a rate cut this year.
BNZ economists said today's National Bank business confidence survey recording a rebound kept the economy on track for a soft landing.
ANZ Investment Bank blamed "illiquid markets" for the sharpness of the kiwi's fall over the holiday.
Heavy selling against the Australian dollar and yen meant support levels were tested when the kiwi reopened for business.
Speculation was increasing of a May interest rate hike by the Reserve Bank of Australia.
The Australian dollar closed on US74.69c from US74.51c on Monday while the kiwi cross was steady on A84.22c.
The traded weighted index finished on 63.67 against 64.47 on Monday.
ECB executive board member Jose Manuel Gonzalez-Paramo said European central bankers would reassess credit tightening plans at next Thursday's meeting, and repeated that they are not pre-committed to any specific timing on credit tightening.
The comments followed data showing German business sentiment rose unexpectedly to a 15-year high in April and that steep oil prices fuelled a pick-up in the pace of inflation.
Some traders said it would be difficult to justify a move up in the euro beyond US$1.25 unless the dollar's yield advantage narrowed much more substantially. The euro close at US$1.2420 compared to US$1.2353 on Monday.
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The following are Reuters currency rates:
5pm today - 5pm Monday
NZ dlr US62.89 - US63.50
NZ dlr/Aust dlr A84.22 - A85.22c
NZ dlr/euro 0.5055 - 0.5141
NZ dlr/yen 71.33 - 73.48
NZ dlr/stg 35.18 - 35.55
NZ TWI 63.67 - 64.47
Australian dollar US74.69c US74.51c
Euro/US dollar US1.2420 US1.2353
US dollar/yen 115.02 115.71
- NZPA
<EM>Currency:</EM> Kiwi partially recovers
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