The New Zealand dollar drifted lower yesterday and was likely to head southwards over the next couple of days, according to dealers.
At 5pm the kiwi closed at US41.85c compared with US42.13c at Wednesday's close. It fell in tandem with the aussie which drifted down to US51.57c from Wednesday's US51.81c.
Mike Symonds, BNZ's chief currency dealer, said the kiwi's failure to test US42.20c overnight had led to some profit taking.
The aussie's fall was thought to have been prompted by the expiry of options this afternoon, "around the A51.50-60c area". "As you get close towards expiry time, you tend to see the spot gravitate towards the level of expiries."
Narrow ranges have been the theme for the week, but Mr Symonds thought over the next couple of days the kiwi would back down towards US41.50c.
"While we hold the broad US41.40-42.40c range in the kiwi, the range trading continues, albeit we believe that the risks are for the kiwi to drift lower from here.
On the crosses at 5pm the kiwi was buying A81.18c (A81.30c at Wednesday's close), 55.95 yen (56.22), 29.30 pence (29.45), 0.7113 Swiss francs (0.7111), and 0.4808 euro (0.4806). The aussie was buying $NZ1.2322 (1.2302).
The trade weighted index was at 51.02 (51.21), the monetary conditions index at minus 764 (minus 748), and 90-day bank bills were at 4.98 per cent (4.95).
On the debt market, the March 2002 bonds were at 4.74 per cent (4.73), the April 2004 bonds were at 5.68 per cent (5.62), the November 2006s were at 6.36 per cent (6.33), and November 2011s were at 6.64 per cent (6.60).
- NZPA
<i>Currency:</i> Drifting kiwi dragged down by Aussie
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