The New Zealand currency traded in a tight range today, but retained its edge over its Aussie counterpart and other trading partners.
The kiwi was buying A88.50c at 5pm today compared with A87.95c at yesterday's close, after a sharp fall in commodity prices which pushed the Australian currency to a 2 month-low.
An anticipated decision by Australian's Reserve Bank (RBA) to keep interest rates static failed to help much, taking the aussie to US74.34c (US74.75c yesterday).
"There was no movement from the RBA today but we still seem to be attracting some buyers on stronger interest rates over Australia," ANZ's Murray Hindley said.
Against the greenback, the kiwi dollar improved slightly to US65.85c, five pips above yesterday's close, and the TWI was stronger at 66.37 (66.17).
Factors in the kiwi's favour included a survey backing the case for New Zealand interest rates staying high, and evidence of solid offshore demand for local bonds.
The survey showed New Zealand workers' confidence rose for the first time in nearly two years in the third quarter, adding weight to a view that interest rates may need further to curb consumer spending.
Dealers said the market was now looking ahead to Friday's non-farm payroll data out of the US.
The US dollar, meanwhile, closed locally at 118.06 against the yen (117.67 yesterday). It hit its highest level against the yen since mid-April on strong sentiment that the Bank of Japan would only raise rates slowly.
The euro was at US$1.2723 (1.2751) as investors sat on the sidelines ahead of a slew of speeches from US Federal Reserve officials, including chairman Ben Bernanke.
The US rate futures market shows an expectation for the Fed to start cutting rates next year, possibly as early as the first quarter.
Rates:
5pm today 5pm Tuesday
NZ dlr/US dlr US65.85c US65.80c
NZ dlr/Aust dlr A88.50c A87.95c
NZ dlr/euro 0.5174 0.5160
NZ dlr/yen 77.74 77.40
NZ dlr/stg 34.93p 34.88p
NZ TWI 66.37 66.17
Australian dollar US74.34c US74.75c
Euro/US dollar 1.2723 1.2751
US dollar/yen 118.06 117.67
- REUTERS
<i>Currency:</i> Dollar strong against Aussie
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