The New Zealand dollar was confined to a narrow range yesterday but appeared to be readying itself t+o pounce on the key US56.80c level.
ANZ Investment Bank chief foreign exchange dealer Murray Hindley said the kiwi traded between US56.60/76c today.
The kiwi managed to cut through the strong US56.50c resistance point since last night.
"It's probably in consolidation before we take out US56.80c and push up through US57c.
"I think it's on continued euro strength, aussie strength and US dollar weakness -- the same old story, a continuation of yield enhancement down this way. The same thing we've been concentrating on for the last three months or so."
In Tokyo trade, the euro continued hovering around four-year highs against major currencies as global investors, fed up with the greenback's weakness, kept pouring money into the higher-yielding single currency.
Investors continued to review currency allocations, shifting funds from the dollar to European currencies on worries about the US economic outlook on the back of twin deficits in the current account and the budget.
In Wellington at 5pm, the euro traded at US$1.1283, up from US$1.1218 yesterday, while the US dollar was buying 118.60 yen against 118.98.
By 5pm, the kiwi was trading at US56.72c compared with its US56.59c close yesterday, while the aussie was at US63.62c (US63.11c).
Against the Australian dollar, the kiwi weakened to A89.17c from A89.38c at the close here yesterday.
This week will be a busy one for central banks with the US Federal Reserve, the European Central Bank, the Bank of England and the Reserve Bank of Australia all reviewing rates.
On other crosses, the kiwi was buying 67.29 yen (67.11 yen), 35.30 pence (35.19), 0.7620 Swiss francs (0.7590), and 0.5027 euros (0.5027).
The monetary conditions index was at 185 (175), the trade-weighted index at 61.08 (60.94), and 90-day bank bill yields at 5.48 per cent (5.49).
The February 2005 Government Bond yields were at 5.16 per cent (5.20), the November 2006s at 5.36 per cent (5.40), and the November 2011s at 5.80 per cent (5.85).
- NZPA
<I>Currency:</I> Kiwi consolidates above key US56.50c
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