The New Zealand dollar was looking "soggy" yesterday, continuing its slow descent from the US49c level.
Over the day the kiwi ground lower after losing ground against the US dollar. It traded tightly, closing near its day high of US48.47c by 5pm, compared with Friday's close of US48.91c.
The Australian dollar fell even further to US56.09c (US56.66c).
Richard Marshall, senior manager of foreign exchange at ANZ Investment Bank, said both currencies were looking a little "heavy" as the supply of kiwi and aussie dollars increased.
He believed the New Zealand dollar could sink to US47.80c over the next two or three days.
But like other dealers, he believed the kiwi was still headed upwards long-term.
'It does need pullbacks occasionally. It did move 500 points without a good sized move back down at any stage and it could easily correct to US46c without that uptrend being in danger of being knocked out."
Overnight he expected the kiwi to trade between US48.20/55c.
On the trans-Tasman cross, the kiwi strengthened to A86.42c (A86.32c). "Against the aussie we're still very strong," Deutsche Bank dealer Tim Robinson commented.
"I think we'll slowly drift back down, given how highly correlated the kiwi/aussie cross has been with the kiwi/US direction. If we do see kiwi/US come off it will be very difficult to maintain that A86c standing."
Offshore the greenback strengthened against all major currencies bar the Australasian and Canadian dollars.
"But you've got to remember the kiwi and aussie did lead the move up initially, so they are the ones people will be watching closely," Mr Robinson said.
Against other major currencies, the kiwi softened to 60.22 yen (61.06), 32.83 pence (33.21), 0.7569 Swiss francs (0.7650) and 0.5126 euros (0.5184).
Against the kiwi the aussie was buying $NZ1.1571 ($NZ1.1583).
On the money market 90-day bills were at 6.01 per cent (5.93), the trade-weighted index was 56.26 (56.75) and the monetary conditions index was at minus 174 (minus 137).
The April 2004 bonds were at 6.00 per cent (6.02), the November 2006 bonds were at 6.35 per cent (6.45), and the November 2011 bonds were at 6.42 per cent (6.60).
- NZPA
<i>Currency:</i> Kiwi begins to edge down from US49c
AdvertisementAdvertise with NZME.