The New Zealand dollar traded sideways today as investors focused on the euro and the prospect of higher European interest rates.
The kiwi largely maintained its strength on moderate two-way flow, easing a little to US63.98c against its close on Friday at US64.04c.
With little data out of New Zealand this week, dealers said the market might be looking to Thursday's trade balance for direction.
"That might come up weaker than expected and so that may become the next trigger for the bearish kiwi dollar sentiment to resume," BNZ currency strategist Danica Hampton noted.
"But in the meantime the kiwi dollar's been quite well bid on dips towards US63.70s and it continues to find topside support around US64.10c."
Ms Hampton said the market was very long in kiwi dollars now, at a record level of 13,300 contracts. She did not see any major local factor which would move the kiwi until the Reserve Bank's next monetary statement on September 14.
On the kiwi-aussie cross, there was a little profit-taking after last week's strong performance in the kiwi's favour but it closed steady at A84.18c.
Elsewhere, the euro reached a record high against the yen in Asia of 148.97 yen and hit $1.2876 against the greenback on hopes the European Central Bank will keep raising rates.
The yen has fallen out of favour as the Bank of Japan has stressed that it will take its time raising rates after lifting them for the first time in six years last month.
The US dollar was little changed at 115.67 yen. Investors focused on US inflationary expectations that rose to the highest since October.
Rates:
5pm today 5pm Friday
NZ dlr/US dlr US63.98c US64.04c
NZ dlr/Aust dlr A84.18c A84.18c
NZ dlr/euro 0.4970 0.4992
NZ dlr/yen 73.99 74.27
NZ dlr/stg 33.93p 33.96p
NZ TWI 63.78 63.92
Australian dollar US76.01c US76.08c
Euro/US dollar US1.2873 US1.2829
US dollar/yen 115.63 115.96
- NZPA
<i>Currency:</i> Dollar sidelined on back of Euro action
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