The New Zealand dollar poked its head above US42c again yesterday at the close of local trade, but remained attached at the hip to its dominant Australian partner.
"(Kiwi) continues to dance to the aussie's tune," one local currency dealer said.
At 5pm, the kiwi was at US42.12c from US41.95c at yesterday's close, having spent most of the day below US42c.
Its antipodean trading mate, the aussie, was at US51.53c (US51.30c late Tuesday).
Dealers expected the local unit to trade between U41.90c and US42.30c overnight, mirroring any moves in the Australian dollar.
The main story in world currency markets yesterday was US dollar - yen, dealers said. The greenback crept up against its Asian counterpart, buoyed by perceptions that the US was likely to fare better than Japan in the global downturn, thanks to timely interest rate cuts and fiscal stimulus.
"The confusion that arose after the September attacks has to some extent calmed down, US stocks have firmed and corporate earnings don't look too bad," said one dealer, explaining why the US dollar was beginning to look more attractive.
By the local market's nominal 5pm close, the US dollar was buying 121.58 yen, against 120.75 yen at Tuesday's close.
It had touched a post-September 11 high of 121.90 yen earlier in New York trade.
World Bank figures issued early in the day backed up a gloomy view of Japan, forecasting its economy would shrink 0.8 percent in 2001, whereas the US economy would post growth of 1.1 per cent.
The kiwi dollar was relatively steady against the Australian dollar on the cross yesterday, buying A81.74c by the close of local trade, against A81.77c Tuesday.
The Australian dollar was buying $NZ1.2234 compared with $NZ1.2230 at Tuesday's close.
On the other crosses the kiwi was buying 0.4639 euros (0.4624 at yesterday's close), 51.21 yen (50.65), 29.09 pence (28.95), 0.9073 marks (0.9043), and 0.6882 Swiss francs (0.6827).
The 90-day bill yields were at 5.12 per cent (5.14), the trade-weighted index was at 49.90 (49.68) and the monetary conditions index was at minus 863 (minus 884).
Among the bonds, the March 2002s were at 4.95 per cent (4.98), the April 2004s were at 5.32 per cent (5.31), the November 2006s were at 5.93 per cent (5.96) and the November 2011s were at 6.45 per cent (6.51).
- NZPA
<i>Currency:</i> Kiwi closes above US42c, Greenback pummels yen
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