The New Zealand dollar closed at more than two-year highs despite the lack of interest from offshore investors in the kiwi debt market.
At 5pm the kiwi traded at US49.80c, up from Friday's close of US49.60c and its highest level since April 2000, while the aussie was at US57.46c (US57.42c)
The kiwi closed on its highs, having traded between US49.70/90c with a late flurry as the aussie moved higher.
Jon Clark of Bancorp Treasury Services said the kiwi did not react to data out yesterday showing non-resident holdings of government debt fell to 46.1 per cent in May, from 47.9 per cent in April.
"In May we did see a 10 per cent surge in the currency, and you would have presumed there would be reflected somewhere that there had been ongoing interest.
"Also there was bit of intervention from the Bank of Japan again so that put a little bit of pressure on the aussie and the kiwi.
"So the market still needs to see confirmation of persistent offshore flows, and at these sort of lofty levels one would be looking for comment from the Reserve Bank on July 3, and more significantly from (US Federal Reserve chairman) Alan Greenspan on Tuesday/Wednesday," Mr Clarke said.
The Reserve Bank of New Zealand reviews the Official Cash Rate, which is currently at 5.50 per cent, next Wednesday.
"I don't think we're going to go too far this week. Whether we can get much above US50c without some fresh input from the aussies and Americans is probably a bit doubtful."
There is a heavy week ahead on the data front with Treasury's Prefu (pre-election fiscal update) today, balance of payments data for the March quarter on Thursday, and the National Bank Business Outlook, gross domestic product (GDP) and merchandise trade import data for May on Friday.
Economists have revised down their forecasts for Friday's GDP figure to 1.1 per cent from 1.4 per cent previously. This comes after a disappointing 0.6 per cent rise in the December quarter.
On the crosses at 5pm the kiwi was at A86.68c (A86.42c at Friday's close), 60.72 yen (61.20), 33.26 pence (33.05), 0.7532 Swiss francs (0.7544) and unchanged at 0.5132 euro.
Against the kiwi, the aussie was buying just $NZ1.1538 ($NZ1.1571).
On the money market 90-day bills were at 5.97 per cent (6.00), the trade-weighted index was at 56.97 (56.94) and the monetary conditions index was at minus 113 (minus 115).
The April 2004 bonds were at 5.97 per cent (6.01), the November 2006 bonds were at 6.37 per cent (6.36), and the November 2011 bonds were at 6.53 per cent (6.58).
- NZPA
<i>Currency:</i> Kiwi closes on highs
AdvertisementAdvertise with NZME.