KEY POINTS:
The New Zealand dollar eased off its peak today as the greenback recovered from its predictable beating when the Federal Reserve cut interest rates as expected.
However, the kiwi fell to a 13-month low against its Australian counterpart, which pushed up above US93c to a 23-year high.
The Fed announced it was lowering the federal funds rate to 4.5 per cent in an effort to stimulate economic activity and keep the US from dipping into a recession.
The central bank moderated expectations for further cuts in short-term rates by saying inflation risks were equal to the possibility of slower growth, but analysts said it would take upbeat US economic data to help lift the beleaguered dollar.
"FX markets seemed less convinced by the Fed's rhetoric and likely want to see further strong US data before the trend weakness in the dollar can be reversed," said currency strategists at Barclays Capital in a note to clients.
The kiwi closed on US77.11c from US76.58c at the same time yesterday.
Against the Australian dollar, it has been declining from near A86c in mid-October. It closed on A82.51c from A83.02c yesterday.
In the wake of the Fed's announcement, the euro jumped to a record high against the US dollar of US$1.4504. It closed on US$1.4462 in local trade.
The trade weighted index closed on 71.32 from 70.89 yesterday.
Reuters currency rates
5pm today 4.45pm yesterday
NZ dlr/US dlr US77.11c US76.58c
NZ dlr/Aust dlr A82.91c A83.02c
NZ dlr/euro 0.5335 0.5304
NZ dlr/yen 88.99 87.92
NZ dlr/stg 37.13p 37.01p
NZ TWI 71.32 70.89
Australian dollar US93.08c US92.19c
Euro/US dollar 1.4462 1.4437
US dollar/yen 115.37 114.75
- NZPA