The New Zealand dollar was subdued yesterday, as investors re-evaluated the attractiveness of the South Pacific currency.
At 5pm the kiwi traded at US43.71c, down from Monday night's close of US43.80c, while the aussie was at US52.89c from US52.99c on Monday.
Bank of New Zealand currency strategist Stu Ritson said both the kiwi and aussie were slightly heavy at the close of the Wellington session, with a risk of a move to the down side for them.
"There still seems very good demand for the kiwi around the US43.60/65c region, but some stops are building below US43.50c so if we go through there I think we'll see a deeper correction," Mr Ritson said.
"It's more a function of market positioning than anything else - people have bought the currency with the expectation it's going to rise, and have been doing so for the best part of two weeks now.
"Since the move higher has stalled, there's some reassessment of whether that positioning is the correct way to go. As these stale long (positions) eat at the market, they weigh on the kiwi a bit."
December quarter balance of payments data out today will be followed on Thursday by gross domestic product (GDP) figures.
Economists on average are picking GDP to have risen 1.1 per cent for the quarter which would mean the economy expanded by 2.5 per cent in 2001, up from 2.1 per cent in the September year.
Thursday is a short trading day ahead of the Easter holiday.
Overnight the kiwi was likely to trade between US43.60/90c, following a range of US43.65/80c during the day.
On the crosses at 5pm the kiwi traded at A82.65c (A82.57c at Monday's close), 0.4983 euro (0.4998), 58.20 yen (58.15 yen), 30.64 pence (30.75) and 0.7278 Swiss francs (0.7305).
The aussie was at $NZ1.2104 ($NZ1.2098).
The monetary conditions index was at minus 518 (minus 514), the trade weighted index was at 52.93 (53.01), and 90-day bank bills were at 5.60 per cent (5.56).
On the debt market, the April 2004 bonds were steady at 6.38 per cent, the November 2006s were at 6.88 per cent (6.89) and the November 2011s were steady at 7.00 per cent.
- NZPA
<i>Currency:</i> Investors poised for kiwi sell-off
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