The kiwi closed lower today showing signs its recent post-float high may have been the summit of its three year climb against the greenback.
The kiwi today continued to retreat from last Friday's post-float closing high of US74.43c, and at 5pm in Wellington was buying US72.92c from US73.53c at the same time last night.
Weighing on the kiwi was a rally by the greenback after the US Federal Reserve Bank raised interest rates and then a worse than expected December quarter New Zealand balance of payments deficit.
If New Zealand economic data continued to soften, "We may have topped out already around US74.40c," ANZ Investment Bank chief foreign exchange dealer Murray Hindley said.
"There are some signs starting to suggest that may be the case."
New Zealand's $3.11 billion December quarter balance of payments or current account deficit brought the annual figure to $9.39 billion -- the highest on record in nominal terms. Although most economists were relatively unfazed by the number, it rattled the kiwi, already under pressure from a rising greenback.
The US dollar's rise came after the Fed lifted interest rates for the seventh consecutive time and noted that inflation has picked up in recent months.
The kiwi's progress would now be determined by tomorrow's local gross domestic product (GDP) figure, Mr Hindley said.
"Depending on the outcome of that, we could either see kiwi continue this move lower into perhaps the low US72c or US71.80c level, or we could see some consolidation and probably a move back into the US73c area again if it's above market expectations."
Meanwhile at 5pm today Australian dollar was at US78.03c (US78.46c), the euro was at $US1.3083 ($US1.3164) and the greenback was at 105.35 yen (105.14).
The trade-weighted index was at 70.91 (71.28) and the monetary conditions index was at plus 1089 (1115).
On other cross rates, the kiwi was buying A93.46c (A93.71c), 0.5576 euro (0.5586), 38.66 British pence (38.75), 76.83 yen (77.33), and 0.8668 Swiss francs (0.8667).
On the money markets, 90-day bank bill yields were unchanged at 7.06 percent, July 2009 bonds were at 6.36 percent (6.32) and April 2015s were at 6.23 percent (6.21).
- NZPA
<EM>Currency:</EM> Softer kiwi may be set for further slide
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