The New Zealand dollar ended near its recent highs today after a session that saw it temporarily dip lower on weaker than expected retail sales figures, a broker said.
At 5pm, the kiwi was fetching US70.10c (from US69.82c at the same time yesterday). In morning trading yesterday, the kiwi hit a near seven-year high of US70.15c on broad-based US dollar weakness.
Tonight, the Australian dollar was at US79.09c (US77.69c).
BNZ currency strategist Sue Trinh said the weaker than expected December quarter retails issued this morning had sparked a sell-off of the kiwi this morning.
Statistics New Zealand confirmed retail sales rose a seasonally adjusted 1.2 per cent, down on the 1.3 per cent expected by economists.
The kiwi opened at US69.97c and pulled back, after Statistics NZ released the data, to about US69.83c.
"The retail sales served to undermine the kiwi... and there was a little bit of profit taking on the kiwi-aussie longs, which has been an ongoing theme for the past several days," Ms Trinh told NZPA today.
In the last half-hour of trading there was a reversal in the longs, nudging the kiwi-aussie cross up to A88.63c (88.70c), and a rally in the euro.
Meanwhile, Ms Trinh said today's weak session was a welcome breather after what had been a volatile week for currency markets.
The kiwi's fresh high yesterday came after US Federal Reserve chairman Alan Greenspan said the greenback's decline should help narrow the gaping US current account gap.
He gave no hint of raising US interest rates from their 45-year low of 1 per cent. That low rate outlook is a critical consideration for the US currency.
Today, the euro was at US$1.2811 (US$1.2839), while the greenback was fetching 105.40 yen (105.32).
On the crosses, the kiwi was buying 0.5473 euro (0.5439), 73.90 yen (73.52), 37.06 British pence (36.91), and 0.8627 Swiss francs (0.8591).
The trade-weighted index was at 68.37 (68.08).
Meanwhile, the monetary conditions index was at plus 760 (737), and 90-day bank bills were at 5.59 per cent (5.58).
February 2006 bond yields were at 5.49 per cent (5.48), July 2009 bonds at 5.71 per cent (5.69), and the April 2013s at 5.86 per cent (5.84).
- NZPA
<i>Currency:</i> Kiwi closes near recent highs after volatile week
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