The New Zealand dollar failed to be ignited by a late rally by the Australian dollar after it broke a technical barrier.
The kiwi travelled in a tight range during the day, hitting a high of US48.48c and closing at its session low of US48.35c.
That was little changed from Monday's close of US48.37c, while the aussie steamed higher to US55.54c (US55.34c), having broken the key US55.50c level.
A local dealer said the kiwi appeared to have insufficient momentum yesterday to follow the aussie higher.
"I think the market maybe needed to buy some (Australian currency) and that's not being followed by the kiwi, which is probably a bit surprising and maybe just the fact that we're just a little bit overbought at the moment."
Both currencies got an unexpected boost on Monday as ratings agency Moody's upgraded New Zealand and Australian foreign currency debt to its highest rating of Aaa, largely because of a change in the agency's methodology.
On Monday night the kiwi spiked sharply higher towards key resistance of US48.50c, but dealers felt that it was unlikely to quite hit that level tonight, although it was not expected to fall below US48.25c.
In the United States, a stock market rally failed to help the dollar sustain Monday's four-month high against the yen at 125.65 or a one-month peak of US96.86c against the euro. But uncertainty over Europe's strict budget rules kept major currencies range bound.
In Wellington at 5pm the greenback rose to 125.18 yen, compared with 124.97 yen on Monday, while the euro was flat at US97.33c.
On the local crosses the kiwi had a mixed day against other major trading partners, buying A87.06c (A87.37c at Monday's close), 0.4967 euro (0.4971), 60.53 yen (60.47) 0.3133 pence (0.3119), and flat at 0.7307 Swiss francs.
The Australian dollar gained significantly on the cross at $NZ1.1486 ($NZ1.1446).
The 90-day bill yield was flat at 5.91 per cent, the New Zealand dollar trade-weighted index was at 55.79 (55.81), and the monetary conditions index was at minus 226 (minus 224).
April 2004 bonds were at 5.79 per cent (5.73), the November 2006 yield was at 6.19 per cent (6.11), and the November 2011 bond yield was at 6.50 per cent (6.40).
- NZPA
<i>Currency:</i> Dollar holds steady but fails to catch Aussie fire
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