The New Zealand dollar broke through the US42c mark yesterday for the first time in a month, and was raring to go higher.
At 5pm the kiwi traded at US41.99c, up from yesterday's US41.65c close, while its aussie counterpart had lifted to US51.86c (US51.52c).
"The kiwi's been pretty bid all day long, it's closing on its highs and it looks like it might push along a little bit higher. There's been some investment bank buying (on the back of) probably the aussie," one local dealer said.
The kiwi's range yesterday was between US41.64c and US42.04c, and he expected it to trade overnight up to US42.30c.
"There will probably be a reasonable step up, I think."
A 25-basis-point rate cut, the 11th this year, by the Federal Reserve yesterday morning, NZ time, was in line with expectations and had little impact on the market, dealers said.
The cut takes the federal funds rate - the interest banks charge each other on overnight loans - to its lowest point since 1961.
The Fed's cut is aimed at bolstering the world's powerhouse economy, which has been in recession since March and was dealt another severe blow by the September 11 terrorist attacks.
Meanwhile, positive New Zealand trade figures released by Statistics New Zealand yesterday also had muted impact on the kiwi.
New Zealand's international purchasing power rose unexpectedly in the third quarter after a small appreciation in the New Zealand dollar saw import prices fall more than export prices.
Also released yesterday were figures showing New Zealand's trade deficit in October was $257 million, not quite as bad as preliminary figures given late last month, but still worse than economists' forecasts.
On the crosses at 5pm the kiwi was trading at A80.93c (A80.89c at yesterday's close), 52.83 yen (52.45), 29.11 pence (29.06), 0.9151 marks (0.9141), 0.6913 Swiss francs (0.6926) and 46.80 euros (46.84).
The Australian dollar was buying $NZ1.2356 from $NZ1.2364.
The trade-weighted index was at 50.16 (49.94), the 90-day bank bills were at 4.86 per cent (4.89) and the monetary conditions index was at minus 861 (minus 881).
On the debt market, the March 2002 bonds were at 4.75 per cent (4.74 percent), the April 2004s were at 5.57 per cent (5.59), the November 2006s were at 6.21 per cent (6.20) and the November 2011s were at 6.63 per cent (6.61).
- NZPA
<i>Currency:</i> Kiwi closes on high, peers over US42c
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