The New Zealand dollar continued to bubble under the US64c mark today with predictions it would strike its target overnight.
By 5pm the kiwi dollar was at US63.76c from US63.45c at yesterday's close. Its Australian counterpart eased to US72.19c from US72.31c last night.
Both Australasian currencies are basking in the wake of multi-year highs, helped in part by a soaring euro and sagging greenback.
Overnight the kiwi reached six-year highs against the greenback (US63.95c) and on the trade weighted index (65.30).
But one dealer said it was "really just the unwind on kiwi-aussie that is driving the market".
The kiwi-aussie touched A88.67c yesterday when investors found themselves short in the currency.
"The kiwi-aussie cross obviously had a very good run and we saw a few sellers taking advantage of the cross at such good levels this morning," said another dealer.
Meanwhile, BNZ currency strategist Sue Trinh said the TWI was now "a considerable risk to the market's expectations for a December rate hike from the RBNZ (Reserve Bank)". The TWI was now five per cent higher than the bank's forecasts last month, she said.
Tonight dealers picked the kiwi to trade between US63.55/ US64c.
On other markets, the euro was still down from yesterday's all time high against the greenback, closing at US$1.1905 in Wellington from US$1.1943 last night.
At 5pm, the greenback was buying 108.92 yen (108.23).
Against other currencies the kiwi improved to A88.32c (87.75c), 69.44 yen (68.68), 37.57 pence (37.30), 0.5357 euro (0.5314), and 0.8322 Swiss francs (0.8219).
The Australian dollar eased to $1.1323 ($1.1390).
The trade weighted index was at 65.10 (64.63), while the monetary conditions index was at plus 499 (464), and 90-day bank bills were at 5.16 per cent (5.42).
On the debt market, April 2004 bonds were at 5.29 per cent (5.29), February 2006s were at 5.77 per cent (5.74), and November 2011s were 6.16 per cent (6.09).
- NZPA
<i>Currency:</i> Kiwi bubbles under US64c
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