KEY POINTS:
The New Zealand dollar eased against its US counterpart today but gained ground against other trading partners.
As investors digested a hawkish outlook from the Reserve Bank yesterday, the New Zealand dollar bowed to a stronger greenback, closing at US69.69c, compared to US70.02c yesterday.
New Zealand's central bank has threatened to raise interest rates in March if the housing market does not cool.
Dealers said there was little reaction to a speech today by Reserve Bank governor Alan Bollard saying New Zealand was vulnerable to a financial crisis because of low savings and growth, hampered by shallow capital markets.
The local currency also broke through A90c, although the Australian market was on holiday.
One dealer noted that the Australian dollar was out of favour because of the very low prospect of an interest rate rise there, as opposed to New Zealand.
He expected the kiwi would find support tonight around US69.50c with resistance at US70.20c.
"The market has already written in the high possibility of an interest rate rise in March," he said.
The kiwi also neared a one-year high against the yen, closing at 84.70 yen (against 84.37 yen yesterday), as soft consumer price data cast doubts of a Japanese interest rate rise next month.
The greenback flexed its muscles against the euro, which was pushed lower by a weak business survey out of Germany.
US durable goods and new homes sales data out tonight will be the last key figures before the US Federal Reserve meets next Wednesday.
The "Fed" is widely expected to keep interest rates on hold at 5.25 per cent, after a string of surprisingly robust economic data in recent weeks.
Currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US69.69c US70.02c
NZ dlr/Aust dlr A90.01c A89.80c
NZ dlr/euro 0.5393 0.5400
NZ dlr/yen 84.70 84.37
NZ dlr/stg 35.47p 35.59p
NZ TWI 69.56 69.61
Australian dollar US77.43 US77.96c
Euro/US dollar 1.2925 1.2960
US dollar/yen 121.53 120.53
- NZPA