The New Zealand dollar was dead in the water today, ahead of tomorrow's Official Cash Rate (OCR) review.
The local unit closed at US43.87c, barely changed from yesterday's US43.89c close. The Australian dollar was equally moribund, ending at US53.13c (US53.36c).
"The kiwi's struggled throughout the day really in a continuation of the sentiment which held yesterday. The market is generally long on kiwi and also the aussie where there was an overhang of long positions," Bank of New Zealand forex manager Mike Symonds said.
"That's kept both of them on the back foot through the day."
Relatively benign inflation data out today had no effect on the kiwi, he said.
Statistics New Zealand said inflation, as measured by the Consumer Price Index, rose by 0.6 per cent in the March quarter, just short of expectations for a 0.8 per cent rise. That takes annual inflation to 2.6 per cent -- at the higher end of the Reserve Bank's 0-3 per cent target range.
That figure has most economists picking the RB will raise the OCR by 25 basis points at 9am tomorrow in order to keep inflation pressures in check.
"From a currency perspective that is already fully priced in," Mr Symonds said.
Overnight, Mr Symonds said the kiwi was unlikely to break into unfamiliar territory.
"The supports in the kiwi certainly remain well intact at this point."
He picked the local unit would range between US43.80c and US44.10c, with the risk of a break towards US43.50c in the longer term.
On the crosses at 5pm, the kiwi was trading at A82.57c (A82.62c at yesterday's close), 0.4984 euro (0.4995), 57.64 yen (58.01), 30.53 pence (30.64) and 0.7309 Swiss francs (0.7320).
The aussie was at $NZ1.2100 ($NZ1.2116).
The monetary conditions index was at minus 508 (minus 494), the trade weighted index was at 52.90 (53.04), and 90-day bank bills were at 5.76 per cent (5.74).
On the debt market, the April 2004 bonds were at 6.32 per cent (6.38), the November 2006s were at 6.74 per cent (6.81) and the November 2011s at 6.86 per cent (6.91).
- NZPA
<i>Currency:</i> Kiwi dead in water ahead of OCR review
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