KEY POINTS:
After stumbling on weak retail sales data yesterday, the New Zealand dollar regrouped to lift to US75.25c today.
However, traders are finding US75.25c a tough chart point since the Reserve Bank's unprecedented intervention on Monday.
The ANZ bank said the warning from a 1.2 per cent slump in April retail sales appeared to have been heard by some, but others had decided to look the other way.
House price figures from the Real Estate Institute today were inconclusive. On the one hand, they showed the median house price continuing to rise -- to $350,000 from $349,000 in April -- but the upward trend slowed considerably.
Analysts say that as soon as house prices stabilise, or fall, the Reserve Bank will be able to ease its tight grip on credit and that should allow the currency to fall.
Until conclusive evidence emerged of a sustained turn in the economic cycle, ANZ expects the NZ dollar to remain range bound and hostage to global sentiment.
The kiwi has spent much of the past week within quarter of a cent either side of US75c, following the Reserve Bank intervention on Monday afternoon.
That intervention was aimed at forcing down the NZ dollar, which beforehand had been around US76.25c, having peaked at a post-float high of US76.40c early Saturday.
Bank of New Zealand currency strategist Danica Hampton said the kiwi had been underpinned by renewed appetite for carry trades -- where investors borrow low yielding currencies, such as the yen and invest in higher yielding but riskier assets, such as the NZ dollar.
That appetite followed a strong rally in global equities overnight and a growing conviction the Bank of Japan would keep its interest rates steady at 0.5 per cent today.
Meanwhile, against the Australian dollar, the kiwi was buying A89.89c from A89.55c at 4.30pm yesterday. The trade-weighted index lifted to 73.58 from 73.33.
In major currency trading, the US dollar held near a 4-1/2-year high, boosted by a climb in US Treasury yields to a five-year high this week, while investors renewed their appetite for risk and sold the low-yielding yen in carry trades.
The US dollar jumped above the psychologically important 122.20 yen level this week as investors abandoned the possibility of a Federal Reserve rate cut this year, prompting a Treasury sell-off that drove the benchmark 10-year yield to its highest since 2002.
The yen stayed under downward pressure as investors warmed to riskier carry trades.
Traders noted that domestic investment trusts were selling the yen against other currencies as they hunt for higher yields on behalf of individual investors putting their summer bonuses to work.
Reuters currency rates:
4.30pm today 4.30pm yesterday
NZ dlr/US dlr US75.25c US75.06c
NZ dlr/Aust dlr A89.89c A89.55c
NZ dlr/euro 0.5647 0.5638
NZ dlr/yen 92.58 92.15
NZ dlr/stg 38.20p 38.05p
NZ TWI 73.58 73.33
Australian dollar US83.72c US83.81c
Euro/US dollar 1.3322 1.3311
US dollar/yen 123.02 122.77
- NZPA