The New Zealand dollar gained almost half a cent after a rumoured New Zealand dollar bond issue was confirmed today.
After the overnight rise, trading during the day was quiet, with the kiwi holding most of its gains to close at US68.92c compared with US68.50c at yesterday's local close. The kiwi also rallied against its Australian counterpart, closing at A91.60c from A91.0c.
The Australian dollar was unchanged against the US dollar at US75.28c. ANZ Investment Bank dealers said it was "hard to stand in the way of a short market that is buoyed by confirmation of upcoming uridashi issuances".
Uridashis are New Zealand dollar-denominated bonds marketed to Japanese retail investors seeking to take advantage of New Zealand relatively high interest rates.
At 7.25 per cent, the official cash rate is the highest in the industrialised world -- a factor that has underpinned the kiwi despite a weakening economy and large current account deficit.
After a long weekend, the local market will be watching Wednesday's labour data to assess whether the Reserve Bank will hike rates again.
The US dollar held near a seven-week high against the yen though the market was largely static as traders awaited a US jobs report for clues about whether the Federal Reserve will keep raising interest rates.
The US dollar has risen since the US central bank bumped up its funds rate for the 14th straight time earlier in the week and signalled more rate rises were possible, though that was seen dependent on solid economic data.
Traders said the market is anticipating that 240,000 jobs were added in January, though forecasts were for as high as 300,000.
"If such a strong figure comes out, the market will start to expect an additional rate hike after one in March," said Kota Kimura, manager of forex at Shinkin Central Bank.
That is likely to keep the dollar well underpinned.
The following are Reuters currency rates:
(5pm Friday - 5pm Thursday)
NZ dlr/US dlr US68.92c - US68.50c
NZ dlr/Aust dlr A91.60c - A91.00c
NZ dlr/euro 0.5700 - 0.5675
NZ dlr/yen 81.62 - 80.96
NZ dlr/stg 38.73 - 38.60
NZ TWI 70.54 - 70.12
Australian dollar: US75.28 - US75.28
Euro/US dollar: US1.2100 - US1.2070
US dollar/yen: 118.39 - 118.24
- NZPA
<EM>Currency:</EM> Uridashi issue pushes dollar higher
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