The New Zealand dollar finished where it began yesterday, although it lost ground compared with the level reached in a late burst of activity on Tuesday.
By 5pm the kiwi traded at US46.00c, down from Tuesday night's close of US46.43c, while the aussie was at US54.01c, not far from US54.05c Tuesday.
Graeme Blackwood of Deutsche Bank said the kiwi had done fairly well to finish where it did, recovering from some selling earlier yesterday.
"Some of it may have been tied up with the US non-rate cut, because the aussie came off as well. Combined disappointment because of the links these currencies seem to have with the global growth scenario," Mr Blackwood said.
"I think there was some unwinding of some kiwi/aussie positions, plus maybe some kiwi selling out of the US."
The US Federal Reserve decided to leave interest rates at 40-year lows of 1.75 per cent, citing economic weakness. The Reserve Bank of New Zealand followed suit several hours later for the same reasons, leaving the Official Cash Rate at 5.75 per cent.
The Reserve Bank said further rate rises this year were now less likely than stated in its March monetary policy statement.
The thumbs down from Fletcher Forests shareholders on the proposed $1.4 billion Central North Island Forestry Partnership deal had little impact on the kiwi.
"There was a rumour late Tuesday that the reason we had gone up was there was a big option Fletcher Forests owned, and since it wasn't executed there may have been some unwinding of the hedge going through," Mr Blackwood said.
The kiwi traded between US45.45c and US46.03c, and was likely to reach a high of US46.30c overnight.
In offshore trade, the US dollar slid to a nearly three-week low against the yen, weighed down by a fall on Wall Street after the Fed's rates decision.
On the crosses at 5pm the kiwi was buying A85.28c (A85.91c at Tuesday night's close), 53.95 yen (55.20), 29.93 pence (30.30), 0.6811 Swiss francs (0.6937), and 0.4657 euro (0.4744).
The aussie was trading at $NZ1.1730 ($NZ1.1639).
On the money market, 90-day bills were at 5.86 per cent (5.90), the trade-weighted index weakened to 52.48 (53.22) and the monetary conditions index eased to minus 536 (minus 461).
On the debt market, the April 2004 bonds were at 5.60 per cent (5.69), the November 2006 bonds were at 5.95 per cent (6.08), and the November 2011 bonds were at 6.18 per cent (6.30).
- NZPA
<i>Currency:</i> Full circle as reserve bank says no rate change
AdvertisementAdvertise with NZME.