The kiwi today maintained the gains it made overnight but traded a tight range as the market awaits tomorrow's interest rate announcement by the Reserve Bank.
At 5pm today the kiwi was buying US71.54c from US70.91c at 5pm yesterday, having ranged between US71.38c and US71.61c during the day.
BNZ currency strategist Sue Trinh said the kiwi remained pretty much capped around US71.65c, while the downside remained very well supported by investors on the hunt for yield.
She said there had been a eurokiwi issuance of $750 million overnight, and there were still some uridashi issuances in the pipeline.
"All of that is serving to keep the kiwi well supported," Ms Trinh said.
Eurokiwis and uridashis are New Zealand and Australian dollar denominated bonds sold to retail investors in Europe and Japan, where central bank rates are far lower than New Zealand's 6.75 per cent and Australia's 5.5 per cent.
The market remains focused on tomorrow's Reserve Bank of New Zealand Monetary Policy Statement at which the bank is expected to leave the official cash rate unchanged.
Interest hinges on the tone of the statement, and whether RB governor Alan Bollard sticks to the hawkish tone of the last release.
The Reserve Bank of Australia (RBA) today opted to keep its key interest rate unchanged at 5.5 per cent. The bank had not been expected to move the rate, but the decision nevertheless weighed slightly on the aussie/kiwi cross.
The kiwi strengthened against the aussie, hitting A93.11c at 5pm today, from A92.61c at the same time yesterday.
On its other major crosses at 5pm, the kiwi was buying 0.5809 euro euro (0.5781), 76.43 yen (75.80), 38.95 British pence (38.87), and 0.8896 Swiss francs (0.8851).
Meanwhile the aussie was at US76.83c (US76.58), the euro was buying US$1.2315 (US$1.2268) and the greenback was buying 106.81 yen (106.89).
The trade-weighted index was at 71.18 (70.68), while the monetary conditions index was at plus 1106 (1070).
On the money markets, 90-day bank bill yields were at 7.04 per cent (7.03) July 2009s were at 5.76 per cent (5.77) and April 2015s were at 5.63 per cent (5.62).
- NZPA
<EM>Currency:</EM> Kiwi pushed above US71c
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