The New Zealand dollar remained in a holding pattern yesterday, sidelined by Tuesday's terrorist attacks in the United States.
Shortly before the local market's nominal 5pm close the kiwi was trading at US42.38c, having pulled back from an overnight low below US42c, but well beneath Thursday's US43.40c close.
"There is not really a lot of trading going on by offshore banks yet because of the New York situation so (kiwi) has had a really small day today," Bank of New Zealand dealer Margaret Skilton said.
"We would expect this to continue until Wall St opens and we get a better handle on what the US situation means for the rest of the world."
The overnight range for the kiwi was picked to be between US42c and US42.50c.
The Australian unit was similarly moribund, trading at US51.52c (US51.49c).
On the crosses the kiwi was buying A82.27c, 50.50 yen, 0.2881 pence, 0.9119 marks, 0.6997 Swiss Francs and 0.4665 euros.
The Australian dollar was buying around $NZ1.2153.
The trade-weighted index was at 49.95, 90-day bill yields were at 5.68 percent and the monetary conditions index was at minus 801.
Among the bonds the March 2002s were at 5.50 percent, the April 2004s were at 5.78 percent, the November 2006s were at 6.14 percent, and the November 2011s were at 6.43 percent.
Expectations have grown that the Reserve Bank of New Zealand will look to ease interest rates in light of the airborne attack on US landmarks which destroyed the World Trade Center and shut down US financial markets.
Deutsche Bank said in a commentary today it now expected the RBNZ to cut its cash rate by 25 bps at the October 3 review as insurance against the global slowdown becoming more protracted.
"We assume that the bank, even before this week's events, had come to the conclusion that there was a good chance that further easing would be required in November. With the significant increase in downside risks this week, it seems sensible to us to bring that rate cut forward," Deutsche Bank said.
Such a move could be quickly reversed if events proved that the slowdown was not as bad as feared and the momentum of the NZ economy held up better than expected, it added.
- NZPA
<i>Currency:</i> Kiwi closes lower in light US-impacted trade
AdvertisementAdvertise with NZME.