The New Zealand dollar took it easy yesterday as Monday's offshore buying interest dried up.
At 5pm the kiwi traded at US42.56c, just above its close Monday night of US42.55c, while the aussie was at US52.05c from US51.98c Monday.
Bancorp Treasury Services director Earl White said the buying interest on Monday was likely to be momentum-trade related, triggered because the kiwi broke through a significant level.
"It's died down, we're just seeing the residual working through the market. There's not a huge amount of natural business being seen - I don't think exporters are rushing to cover their exposure at these levels, and we are seeing a steady stream of import business," Mr White said.
The kiwi traded in a very tight range of US42.50/65c, and it was likely to follow any moves in the aussie or euro overnight, although there was little action on the horizon.
"I think we're seeing a two-way market with people not really sure what the medium term direction of the currency is. Unless we see a continuation of the offshore interest in the kiwi, I think we'll just see the kiwi drift back," he said.
Rising commodity prices pushed the Australasian currencies to their highest levels in more than a month on Monday night.
They and the Canadian dollar - the dollar-bloc countries - also received a boost after US manufacturing sector data last Friday brightened the prospects of global economic recovery.
On the crosses at 5pm the kiwi traded at A81.66c (A81.89c at Monday's close), while the aussie continued rising to $NZ1.2231 ($NZ1.2212).
The kiwi also gained on other major currencies, buying 56.38 yen (56.60), 29.92 pence (29.95), 0.7229 Swiss francs (0.7264), and 0.4889 euro (0.4912).
The trade weighted index was at 51.73 (51.82), the monetary conditions index eased to minus 684 (minus 679), and 90-day bank bills were at 5.08 per cent (5.05).
On the debt market, the March 2002 bonds were at 4.70 per cent (4.74), the April 2004 bonds were at 5.87 per cent (5.94), the November 2006s were at 6.49 per cent (6.53), and the November 2011s were at 6.75 per cent (6.77).
- NZPA
<i>Currency:</i> Kiwi consolidates after high rise overnight
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