After losing considerable ground overnight, the New Zealand dollar struggled back up to reasonable opening levels and consolidated its position during the day yesterday.
At 5pm the kiwi closed around its day lows of US46.65c, half a US cent down on Wednesday's close at US47.16c, after trading within a tight 20 point range.
The Australian dollar fared no better, closing at US54.28c compared with US54.80c Wednesday.
"On Wednesday we left here quite well bid around US47c and then there was some heavy selling by a US investment house when it broke US46.70c and we saw it trade all the way down to US46.20c," Murray Hindley, ANZ Investment Bank's chief foreign exchange dealer, said.
"We got back in in the morning and it was US46.55/60c, traded up to US46.80c, but pretty much for the afternoon session it was quite heavy through Asia."
Dealers said that if the aussie fell below the US54.20c overnight, the kiwi could re-test Wednesday night's low. They picked an overnight resistance of US46.80c and support at US46.50c.
Wednesday night's sell-off in the kiwi reflected a volatile night for most currencies, which might have been affected by comments from Finance Minister Michael Cullen that he was pleased the kiwi dollar had stopped rising.
There was little reaction to the appointment of Allan Bollard as the Reserve Bank's new governor. Market observers said Mr Bollard appeared to be a pragmatic choice, unlikely to take either a dovish or hawkish approach to monetary policy.
On the crosses at 5pm the kiwi was buying A85.95c (A86.10c at Wednesday's close), 55.49 yen (55.69), 30.54 pence (30.76), 0.7007 Swiss francs (0.7043), and 0.4770 euro (0.4797).
The aussie was trading at $NZ1.1635 ($NZ1.1617).
On the money market, 90-day bills were flat at 5.90 per cent, the trade-weighted index was at 53.46 (53.81) and the monetary conditions index eased to minus 440 (minus 407).
On the debt market, the April 2004 bonds were unchanged at 5.73 per cent, the November 2006 bonds were flat at 6.11 per cent, and the November 2011 bonds were at 6.36 per cent (6.35).
- NZPA
<i>Currency:</i> Kiwi consolidates as downward pressures mount
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