KEY POINTS:
The New Zealand dollar was unable to make any headway in quiet trade today, despite a trickle of ongoing demand.
By 5pm, the kiwi was at US70.25c, unchanged from this morning but up from yesterday's US70.10c close. Against the Australian dollar, the kiwi was at A89.40c from the A89.33c close yesterday.
"It started off pretty slowly this morning ... then we saw some selling interest out of Japan and that really pressured the kiwi down. Then we saw some demand against the cross and a few local corporates were adding to their cover, so it quickly firmed up again," Bank of New Zealand currency strategist Danica Hampton said.
"Given the market's quite thin and illiquid, the price action was just exacerbated by the liquidity," Ms Hampton said.
"Yesterday there was quite a bit of action because we had the Reuters dealer system down in China and Taiwan, so we saw quite a lot of random transactions we probably wouldn't normally have seen."
She tipped a range between US70.00c and US70.50c over the next day or so.
"In the meantime, probably expect the kiwi to be underpinned by expectations of the possibility of a hike from the RBNZ for the end of January."
There had been steady demand for the kiwi against the Aussie, mainly from short-term speculative players.
The yen steadied today, staying clear of a two-month low against the US dollar and an all-time low versus the euro on caution that the Bank of Japan could raise interest rates as early as January.
Japanese importers actively bought the US dollar on what is the last business day the year for many Japanese companies.
But the US currency's gains were hampered by yen buying following a sharp rise in Japanese government bond yields in the past two sessions on investor jitters over the risk of a January rate rise, traders said.
Reuters currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US70.25c US70.10c
NZ dlr/Aust dlr A89.40c A89.33c
NZ dlr/euro 0.5356 0.5340
NZ dlr/yen 83.46 83.29
NZ dlr/stg 35.90p 35.80p
NZ TWI 69.41 69.25
Australian dollar US78.59c US78.48c
Euro/US dollar 1.3118 1.3129
US dollar/yen 118.78 118.82
- NZPA