KEY POINTS:
The New Zealand dollar lost ground on both its major crosses today.
The US dollar strengthened against most currencies on better than expected trade figures yesterday. One it didn't rise against was the Australian dollar, which gained on strong jobs data that has increased the prospect of a rate rise.
The kiwi ended at 5pm today on US68.86c, down from US69.07c at the same time yesterday.
Against the Australian dollar the kiwi closed the local session on A87.97c from A88.53c at 5pm yesterday while the Australian dollar firmed to US78.28c from US78.01c against the greenback.
The New Zealand trade weighted index fell to 68.43 from 68.64.
Traders said the session was quiet and there were no local factors influencing the currency.
The US trade deficit unexpectedly fell for a third straight month in November. The deficit fell by 1 per cent to US$58.2 billion ($85.3 billion), the lowest monthly total since July 2005.
ANZ bank said US dollar strength had weakened most currencies, and easing commodity prices were also undermining the kiwi.
While the kiwi was still some distance from the key support level of US68.30c, rising offshore yields may bring that into question sooner rather than later, ANZ said.
Interest rate announcements were expected tonight from both the Bank of England and the European Central Bank (ECB).
While neither was expected to raise rates, it was thought the ECB would take the opportunity to start preparing the market for a possible rate increase in the next couple of months.
The US currency climbed for a fifth session of the past six against an index of major currencies, hitting a six week high against the euro.
The improvement in the trade gap suggested both that the United States' heavy dependence on foreign capital to cover its deficits may be waning slightly and that exports will give a boost to overall economic growth in the fourth quarter.
The ECB is widely seen holding rates steady at 3.5 per cent after the meeting, but many are looking for another rate increase in the first quarter, possibly as soon as next month.
"We believe that the most likely scenario is for the ECB to hike at its March meeting," currency strategists at Morgan Stanley said in a note to clients.
The Bank of England also is meeting on policy and is seen leaving rates steady at 5.0 per cent.
Rates:
5pm today 5pm yesterday
NZ dlr/US dlr US68.86c US69.07c
NZ dlr/Aust dlr A87.97c A88.53c
NZ dlr/euro 0.5314 0.5326
NZ dlr/yen 82.42 82.38
NZ dlr/stg 35.60p 35.67p
NZ TWI 68.43 68.64
Australian dollar US78.28c US78.01c
Euro/US dollar 1.2958 1.2970
US dollar/yen 119.72 119.28
- NZPA