After partying with the Australian dollar over that country's election results, the New Zealand dollar settled down, but on a stronger note than last week.
"The market took the Australian election result very positively and the aussie dollar opened significantly higher than it had closed in New York and basically took the kiwi with it," said ANZ senior forex dealer Richard Marshall.
The re-election of Australian Prime Minister John Howard saw the kiwi dollar surge to US42.43c before pulling back in tandem with the aussie to a steadier US42.16c just after 5pm. It closed on Friday at US41.83c.
The aussie, which closed on Friday at US51.31c, soared nearly 70 points during the day, drifting off to US51.77c.
Dealers picked that the kiwi's overnight trading pattern would largely mirror its fortunes today, between US42.05-43c.
Looking ahead, Mr Marshall said the kiwi dollar could be in demand by offshore investors if the Reserve Bank decides to cut interest rates again on Wednesday.
"If the rates are cut, it's taken these days as stimulatory to the economy, so the New Zealand dollar should rally."
On the crosses at 5pm, the kiwi traded at A81.45c (A81.53c from Friday's close), 0.4719 euros (0.4696), 50.78 yen (50.32), 28.94 pence (28.79), 0.9235 marks (0.9183), and 0.6919 Swiss francs (0.6878). The Australian dollar was buying $NZ1.2279, from $NZ1.2266 on Friday.
The trade-weighted index was at 49.98 (49.70), 90-day bank bills rose to 4.88 per cent (4.86), and the Monetary Conditions Index tightened to minus 878 (minus 908).
On the debt market, the March 2002 bonds were at 4.78 percent, the April 2004s were at 5.08 per cent (5.00), the November 2006s were at 5.60 per cent (5.53), and the November 2011s at 6.12 per cent (6.04).
- NZPA
<i>Currency:</i> Australian election leaves Kiwi on a high note
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