The New Zealand dollar had a reversal of fortune against the Australian dollar today , jumping nearly a cent after a sharp fall yesterday.
The kiwi hit a four-and-a-half year low on the Australian cross rate yesterday, after the Reserve Bank of Australia (RBA) hiked interest rates to their highest since 2001.
Today it ended the day at A81.40c , against A80.42c at 5pm yesterday. It also gained strongly against the US dollar at US62.15c from US61.72c yesterday.
It traded between US62.06/62.37c and looked likely to find support around US61.80c tonight.
"The market just got itself quite short , and people decided to take profits," BNZ currency strategist Danica Hampton said about the kiwi's rebound overnight.
One major bank was reported to be advising clients to go short on Australian dollars because of a less hawkish tone in yesterday's RBA comments.
Dealers said for the moment, the kiwi seemed likely to be driven by offshore factors.
The next key event would be the Australian central bank's policy statement tomorrow and US payroll figures on Friday night, followed by the US Federal Reserve Bank's interest rate decision next week.
Reuters currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US62.15c US61.72c
NZ dlr/Aust dlr A81.40c A80.42c
NZ dlr/euro 0.4873 0.4812
NZ dlr/yen 71.38 70.60
NZ dlr/stg 33.14p 32.89p
NZ TWI 62.02 61.39
Australian dollar US76.38c US76.72c
Euro/US dollar US1.2755 US1.2822
US dollar/yen 114.78 114.37
- NZPA
<i>Currency:</i> Kiwi bounces back strongly against Aussie
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