The New Zealand dollar climbed back up over US64c in sluggish trading today as the US dollar weakened across the board.
By 5pm the kiwi was buying US64.07c from US63.98c at 5pm yesterday.
Against the Australian dollar, the kiwi weakened overnight but recovered most of that ground through the day. It was buying A84.12c from A84.18c last evening. The TWI ended on 63.88 from 63.78.
The US dollar hit a fresh two-month low against the euro overnight as investors shunned the greenback amid signs the US economy was slowing. The kiwi traded as high as US64.25c in overnight business.
The US currency also fell against most of its other rivals, though the selling momentum that began Friday after soft US consumer sentiment data started to ease late in the New York session.
The gloomy market mood was heightened by expectations the US Federal Reserve will hold interest rates steady again next month, chipping away at the US dollar's yield advantage over other currencies. In contrast, the European Central Bank is expected to keep raising rates.
ANZ bank said initial NZ dollar selling had been easily absorbed by those seeking yield enhancement yesterday.
Overnight, further demand emerged, particularly for the Australian dollar, helping spur the kiwi higher, ANZ said.
Against the yen, the euro hovered near its highest level since the single European currency was launched in 1999, on forecasts its yield advantage will widen.
"Market players get a sense of security with buying euros due to the outlook for higher rates in the euro zone," said a trader at a Japanese bank.
The ECB is expected to tighten credit again after bumping rates up to 3 per cent earlier this month, while the Bank of Japan has said it would take time hiking rates after lifting them to 0.25 per cent last month in its first rise in six years.
A Reuters survey of 60 economists showed most see the US economy slowing down enough to prompt a rate cut by the Fed in the second half of next year.
Rates:
5pm today 5pm Monday
NZ dlr/US dlr US64.07c US63.98c
NZ dlr/Aust dlr A84.12c A84.18c
NZ dlr/euro 0.4976 0.4970
NZ dlr/yen 74.42 73.99
NZ dlr/stg 33.79p 33.93p
NZ TWI 63.88 63.78
Australian dollar US76.16c US76.01c
Euro/US dollar US1.2870 US1.2873
US dollar/yen 116.14 115.63
- NZPA
<i>Currency:</i> Dollar climbs back over US64c
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