KEY POINTS:
The New Zealand dollar slipped to a year-low against its Australian counterpart in a quiet session, while the market awaited key US economic data.
By 5pm, the kiwi had fallen to US69.16c from US69.26c this morning, but was up from US68.95c late yesterday afternoon.
The kiwi initially fell as investors unwound carry trades, which borrow low-yielding currencies like the yen to invest in high-yielding currencies like the kiwi and Australian dollar.
However, the kiwi steadied and stuck to a 30-point range as the market waited for tonight's US employment data.
Against the Australian dollar, the kiwi was at A83.66c from A83.70c at 5pm yesterday.
The kiwi plunged A3c this week.
"The fundamental view behind it is that growth in Australia looks brighter than that in New Zealand, and there's a risk the RBA might have to tighten rates after the election later in the year whereas people are more convinced the RBNZ's on hold now," said BNZ currency strategist Danica Hampton.
Recent Australian data has been stronger than expected, encouraging more speculative players to sell kiwi and buy aussie this week, she said.
Next Thursday, the RBNZ is expected to leave its official cash rate at 8.25 per cent, but acknowledge volatility in the market and say it will ensure there is liquidity for the cash markets to continue to function.
The US dollar hovered near a one-month low against a basket of major currencies ahead of the US jobs report, as investors waited for signs that the housing and credit market crisis is making employers cautious.
The yen edged up slightly and higher-yielding currencies slipped as some regional stock markets dipped and kept investors wary of holding risky positions, with the Nikkei share average losing 0.6 per cent.
Overnight, the European Central Bank kept rates steady at 4.0 per cent, and the Bank of England held rates at 5.75 per cent.
Reuters currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US69.16c US68.95c
NZ dlr/Aust dlr A83.66c A83.70c
NZ dlr/euro 0.5060 0.5047
NZ dlr/yen 79.58 79.47
NZ dlr/stg 34.23p 34.09p
NZ TWI 66.44 66.28
Australian dollar US82.71c US82.33c
Euro/US dollar 1.3667 1.3647
US dollar/yen 115.10 115.37
- NZPA