The New Zealand dollar packed up for Christmas just a little weaker, belying busy action within a tight range.
It closed at 43.87c, trading in a 43.73-91c range.
"It's been very active, there's been a lot of two-way flow, although I think if you were standing aside from the market you would probably say there's nothing much going on," BNZ forex manager Greg Ball said.
But locals were very active, presumably clearing positions or setting last-minute hedges ahead of the break.
Exporters bought dips keenly and foreigners took profits, locking the kiwi in its tight range.
Mr Ball said the kiwi would likely resume its recent rally, with the next topside struggle at 44.10-15USc. "Over this Christmas and New Year period 44.60USc is achievable," he said.
Sustainability, however, depended on what the greenback did. Mr Ball cautioned against people buying into the hard landing talk regarding the US economy, and was also wary of the enthusiasm surrounding the local economy's recovery prospects.
BNZ is the most bearish of high-profile forecasters, and indeed copped some jibes from Finance Minister Michael Cullen at the release on Tuesday of the Treasury's rosy December Economic and Fiscal Update.
Mr Ball believed the US Fed would summarily cut interest rates to prevent a hard landing after a decade of fabulous growth.
"Therefore, I still see capital flows, I still see strength in the US economy. We're not going to see 50USc in the kiwi in the very near term."
Bonds rallied strongly, squeezing below 6 per cent at the longer end.
- NZPA
<i>Currency:</i> Flat close belies boisterous day
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