The New Zealand dollar was rangebound in local trading today, awaiting direction from offshore markets.
At 5pm the kiwi was buying US70.87c against US70.88c at yesterday's local close.
It failed to hold on to solid gains which saw it touch US71.23c in European trading overnight -- its highest level since late June.
Trading was subdued, with US investors sidelined by a Labour Day holiday.
On the data front, the ANZ World Commodity Price Index fell for a third straight month in August, down 0.9 per cent, further backing views that prices have peaked.
The US dollar rose against the euro today, recovering a full cent from three-month lows hit late last week, as investors awaited signs the Federal Reserve could soon pause its year-long run of interest rate rises.
The devastation of Hurricane Katrina has raised worries about the damage to the US economy, stirring expectations the Fed will take a break at its September 20 meeting to assess the fallout.
But a further retreat in oil prices from last week's record highs took pressure off the US dollar and the yen -- the two currencies that have absorbed the biggest blows from soaring energy costs.
Locally, the Bank of New Zealand has revised its outlook for the New Zealand dollar in the wake of Hurricane Katrina. It now expects the kiwi to break higher -- moving to US71c by the end of September.
Longer term, prospects are bleaker, with a slump to US61c forecast by mid 2006.
- NZPA
<EM>Currency:</EM> Kiwi rangebound, fails to recapture overnight high
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