The New Zealand dollar has eased back into familiar territory after yesterday slipping on news former Iraqi dictator Saddam Hussein had been nabbed.
At 5pm, the kiwi was at US64.82c (from US64.60c at the same time last night), having traded between US64.78c and US64.95c today.
Westpac currency strategist Johnathan Bayley said the United States dollar had "bounced" on news of Saddam's capture over the weekend.
"What we saw yesterday... was the kiwi opening at US64.25c, basically the news (of Saddam's capture) seemed to be priced in almost entirely on the open," Mr Bayley said.
"There was only a very brief dollar rally (after the capture) and it's spent most of today giving that back."
Since early December the kiwi has traded in the mid-to-high US64c range, briefly falling below that yesterday when the United States confirmed it had Saddam in custody.
Mr Bayley said it was market sentiment that was keeping the greenback low today, but other market factors supported a bounce, which could last up to two months.
For the meantime the bear market was keeping the dollar low, he said.
The euro today pushed to a new high of US$1.2325, but it had settled slightly lower at US$1.2319 (US$1.2206).
"On the basis that I'm looking at a dollar bounce I don't think the near-term high (for the euro) is too far away.
"In terms of the big picture we have quite a bit more dollar weakness priced into our exchange rate forecasts for next year."
Westpac had the euro priced at US$1.32 by the end of next year, and Mr Bayley predicted the kiwi would tip the US70c mark before settling at US67c at the end of 2004.
Meanwhile, the Australian dollar was at US74.37c (US73.99c), and the greenback was fetching 107.74 yen (108.02).
On the crosses, the kiwi was buying A87.17c (A87.32c), 0.5263 euro (0.5293), 69.86 yen (69.78), 37.11 pence (37.08), and 0.8180 Swiss francs (0.8225).
The trade weighted index was at 65.10 (65.10), the monetary conditions index was at plus 488 (486), and 90-day bank bills were at 5.33 per cent (5.31).
On the debt market, April 2004 bonds were at 5.19 per cent (5.17), February 2006s were at 5.64 per cent (5.65), and November 2011s were at 5.99 per cent (6.04).
- NZPA
<i>Currency:</i> Dollar eases back into familiar ground
AdvertisementAdvertise with NZME.