The New Zealand dollar pulled back from last week's highs yesterday, as analysts predicted a spell of short-term consolidation.
At 5pm the kiwi was trading at 44.07USc, compared with Friday's close of 44.40USc. The aussie dollar had not eased quite so far, closing at 53.36USc, against its Friday close of 53.58USc.
The speed of the rising dollar last week caught analysts by surprise. The Bank of New Zealand said yesterday that it correctly predicted a break at the start of last week below 43.50USc but did not expect it to recover so quickly.
Instead, the kiwi tested 44.46USc on Friday, ignoring the fact that global growth and the US dollar were moving sideways. The kiwi, benefiting from strong retail and business confidence figures, has moved in tandem with the aussie.
"Dips have been non-existent and reflect the upbeat sentiment," said BNZ currency strategist Stu Ritson.
With a 25 basis point rise expected in interest rates this week, the longer-term environment for the New Zealand dollar was supportive, he said. A rise to 44.50USc, "en route to US45.50c", seemed likely in coming weeks.
Data out this week includes the inflation-signalling consumer price index, while the Reserve Bank reviews the key interest rate, the official cash rate, tomorrow.
On the crosses at 5pm, the kiwi was trading at 82.62Ac (82.91c at Friday's close), 0.4995 euro (0.5041), 58.01 yen (58.71), 30.64 pence (30.91) and 0.7320 Swiss francs (0.7390).
- NZPA
<i>Currency:</i> Dollar pulls back but strength seen
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