The New Zealand dollar traded in a tight range just above US63c today after the Reserve Bank (RB) left interest rates unchanged at 7.25 per cent for the third straight time since its December review.
At 5pm the kiwi was buying US63.04c, just shy of its local open of US63.32c but above last night's US62.89c close.
Against the Australian dollar it slipped to A83.75c from A84.22c as the interest rate outlook for the New Zealand and Australian economies continued to diverge.
Today's cash rate decision was accompanied by a hawkish statement from RB Governor Alan Bollard promising no rate cuts this year but economists were sceptical -- with some still holding out for a rate cut as early as September.
"We're still looking for an easing later this year," First NZ Capital economist Jason Wong said.
"We now expect the first interest rate cut to be October," Westpac chief economist Brendan O'Donovan said.
"The longer interest rates are kept on hold, then the more prolonged will be the economic downturn," he added.
By contrast, Australian interest rates are expected to rise at the Reserve Bank of Australia's next review, after inflation figures recently surprised on the upside.
In other economic news out today, New Zealand posted a surprise $59 million trade surplus in March, although that did little to dampen concerns about the country's current account imbalance, with the annual deficit pushing out to a March year record of $7.072 billion.
Statistics New Zealand also issued a revised March year inflation figure of 3.3 per cent, compared with an erroneously calculated 3.4 per cent figure released last week.
The US dollar continued to slide against the major currencies, particularly the euro, where it matched a seven-month low hit the previous day as a renewed focus on the huge US current account deficit outweighed solid US economic data and hopes for US rate hikes.
The following are Reuters currency rates:
5pm today - 5pm Wednesday
NZ dlr US63.04c - US62.89c
NZ dlr/Aust dlr A83.75c - A84.22c
NZ dlr/euro 0.5060 - 0.5055
NZ dlr/yen 72.31 - 71.33
NZ dlr/stg 35.30 - 35.18
NZ TWI 63.65 - 63.67
Australian dollar US75.25c - US74.69c
Euro/US dollar US1.2453 - US1.2420
US dollar/yen 114.74 - 115.02
- NZPA
<EM>Currency:</EM> Kiwi trades in narrow range
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