The kiwi continued to tread water in thin holiday trade today.
At 5pm today the kiwi was at US71.44c compared with US71.55c at 9.30am this morning and US71.81c at 5pm yesterday.
International dealers said the market lacked liquidity, owing to a seasonal lull, making currencies more vulnerable to sharp price swings.
Global currency trading was choppy in thin volume as Thursday marked the last trading session of 2004 for Tokyo dealers. The currency trading hub of London has returned from the Christmas market holidays, but volumes remained quiet ahead of the New Year break.
With the New Year approaching, traders and investors were looking for the US dollar to extend its roughly three-year decline against other major currencies due to the swelling US current account deficit, which is already at record highs.
Global investors' worries about the US current account deficit have depressed the greenback by some four percent against the yen and eight percent versus both the euro and the British pound so far this year.
Many analysts predict further losses if markets continue to question the future ability of the US economy to attract enough foreign funds to plug its external deficit.
"The market has no interest in trying to buy (US) dollars...There are also not too many people actively dealing now," said Paul Mackel, currency strategist at ABN AMRO in London.
At 5pm today the euro was trading at $US1.3619, against $US1.3582 at 5pm yesterday.
Against the yen, the dollar was trading at 103.84 yen (from 103.47 yen at 5pm yesterday), and the Australian dollar was trading at US77.52c (US77.77c).
On the crosses at 5pm today the kiwi was at A92.14c (A92.36c), 0.5246 euro (0.5288 euro), 37.17 British pence (37.27), 74.19 yen (74.30) and 0.8095 Swiss francs (0.8158).
The trade-weighted index was at 68.60 (68.92), while the monetary conditions index was at plus 892 (915).
There was no movement in the money markets. The 90-day bank bill yields were unchanged at 6.74 percent, February 2006 bonds were at 6.37 percent (6.39), July 2009s were unchanged at 6.05 percent and April 2013s were unchanged at 6.01.
- NZPA
<EM>Currency:</EM> Kiwi treads water ahead of new year break
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