The high flying New Zealand dollar had a "whippy" day on currency markets yesterday on the back of the currently frisky euro, but Finance Minister Michael Cullen says he's getting saddle sore.
After hitting a fresh five-year high of US58.21c overnight the kiwi continue to ride shotgun with the euro as it drifted down to US114.66c from about US115.66c a dealer told NZPA.
The kiwi found support at about the US57.47c mark before rising again as the euro strengthened once more against US dollar weakness.
However, Dr Cullen said he was not comfortable with the kiwi at its current levels.
"It places stress on the tradeables sector," he told Reuters in an interview.
Dr Cullen, due to deliver his fourth budget tomorrow, said market participants expected the New Zealand-Australian dollar cross rate to move back to around the mid-80 Australian cent range perhaps by the end of the year.
"Around that mark is the comfort zone, pushing toward A90 (cents) is discomfort. Over A90 is getting very uncomfortable indeed for manufacturing exporters," he said.
But the dealer said although he expected the kiwi to trade in a US57.50c to US58.20c range, "we like the euro higher, so we might have a push on the top side tonight".
At 5pm in Wellington the kiwi was at US57.77c down slightly from US57.97c on Monday night, while the euro was at US115.39c compared to US115.6c last night.
The Australian dollar was buying US64.82c (US64.90c) and $1.1223 ($111.96) while the kiwi was buying A89.04c (A89.32c). The US dollar was buying 116.59 yen (116.85 yen).
On the crosses at 5pm, the kiwi was buying 67.36 yen compared to 67.79 yen at 5pm on Monday, 35.93 pence (36.08), 0.7577 Swiss francs (75.80), and 0.5007 euro (0.5018).
The monetary conditions index was at 217 (240), the trade-weighted index was at 61.50 (61.78) and 90-day bank bill yields were at 5.45 per cent (5.44).
The February 2005 yields were at 5.09 per cent (5.09), the November 2006s were at 5.27 per cent (5.25), and the November 2011s were at 5.61 per cent (5.59).
- NZPA
<i>Currency:</i> Dollar's high ride leaves Cullen uncomfortable
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