The New Zealand dollar responded to the first trading session of the local market for the year with a sharpish slide.
It closed at US70.07c, having traded a sizeable range between US70.65c and US69.70c during the session. Before the New Year holiday, it had finished 2004 on the local market at US70.84c.
ANZ senior dealer Mark Elliott said the kiwi was being buffeted by US dollar-euro trading, where traders were scrambling to unwind short US dollar positions.
"This is a flow-on from that wave. It's further position-squaring by model-type funds."
Mr Elliott said the current trend may well continue a little longer but he expected the kiwi to find support near current levels.
"I think we are still in a large up-trend and these are good opportunities to buy kiwi because I think two or three months down the track we are going to up at US74 or US75c."
The euro was closed here at US$1.3260c compared with its US$1.3295 opening.
The Australian dollar fell in sympathy -- to US76.50c from its A76.64c local opening.
The kiwi closed lower on all the crosses against its December 31 levels. By 5pm, it was buying A91.59c (A92.15c), 0.5277 euro (0.5275), 37.20 British pence (37.35), 73.15 yen (73.91), and 0.8175 Swiss francs (0.8143).
The trade-weighted index fell to 68.03 (68.82), while the monetary conditions index was at plus 853 (911).
On the money markets, the 90-day bank bill yields were at 6.76 per cent compared with 6.76 per cent on December 31; February 2006 bonds were at 6.40 per cent (6.35 per cent), July 2009s were at 6.12 per cent (6.02), and April 2013s were at 6.11 per cent (5.98).
- NZPA
<EM>Currency:</EM> NZ dollar slips to US70c
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