The New Zealand dollar softened further against the greenback today, but one financial services firm is picking the kiwi to show strength in the medium term.
At 5pm today the kiwi was buying US68.62c, from US68.76 at 5pm yesterday.
Financial services firm Citigroup said today it expected the kiwi to show continued resilience in 2006.
Some commentators have been picking the New Zealand dollar would depreciate this year with the slowing economy looking likely to spell the end of the Reserve Bank's tightening cycle, but Citigroup has a mid-year target of US71c. The target is based on Citigroup's expectations the US dollar would depreciate, and that demand would continue for kiwi denominated bonds.
But Citigroup said it expected the kiwi to underperform on other cross rates.
Today at 5pm the kiwi was buying A91.90c from A91.97c at 5pm yesterday.
Meanwhile the foreign exchange market is waiting on US employment data due out tonight, which traders said could indicate whether selling of the US currency would continue in the near term.
Dealers said the market was holding its breath to see whether forecasts for a healthy 200,000 new jobs in the US December would be met, and whether that would be enough to end a month-long spell of trimming long US dollar positions.
The following are Reuters currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US68.62 US68.76
NZ dlr/Aust dlr A91.90 A91.97
NZ dlr/euro 0.5677 0.5682
NZ dlr/yen 79.70 79.91
NZ dlr/stg 39.13 39.14
NZ TWI 70.18 70.29
Australian dollar US74.68 US74.73
Euro/US dollar US1.2089 US1.2100
US dollar/yen 116.14 116.21
<EM>Currency:</EM> Kiwi slightly softer against USD, longer term strength seen
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