The New Zealand dollar lost a little ground yesterday after the US dollar bounced on a surprise Swiss rate cut and a weaker Japanese yen.
By 5pm the kiwi was at US44.55c from US44.85c at Thursday night's close while its Australian trading mate was at US53.61c (US53.93c).
The Swiss National Bank surprised the market on Thursday with a half-percentage point rate cut. The cut was designed to counter a recent surge in the Swiss franc due to concerns it might hit the country's exports and undermine its economic recovery.
That, combined with a market holiday in Tokyo for Constitution Day, saw the US dollar come back into favour.
Here the US dollar was buying 127.93 yen by 5pm from 127.06 yen at Thursday's local close, while the Swiss franc eased to 1.6099. The greenback had hit a two-month low of 126.96 yen on Wednesday.
"The kiwi today has actually been in a relatively static market," Deutsche Bank dealer Tim Robinson said.
"We sort of sloped off originally from the open. It's traded in a US44.44c to US44.60c range on the day and it's just basically been a market in which kiwi has tracked the aussie pip by pip."
Key data out locally yesterday including the quarterly employment survey and the labour cost index, had little impact on the kiwi.
"The market just shrugged them off and just ignored them really," Mr Robinson said.
Salary and wage rates, including overtime, as measured by Statistics New Zealand's Labour Cost Index (LCI), increased by 0.5 per cent in the March quarter, after similar increases in the last half of 2001.
That was close on expectations, with economists picking an average rise in wages of 0.55 per cent on the previous quarter.
Overnight Mr Robinson expected the kiwi to make a comeback, trading between US44.55c and US44.75c.
"My thoughts are that this is the dip to buy. A lot of people were saying when we were up around the high US45c-mark that they were looking for a dip to buy and this is it.
"I don't think we'll go below US44.40c -- I think we'll hold. We're going to go higher from here. We'll probably cruise up next week and take out the highs."
On the crosses at 5pm the kiwi traded at A83.08c (A83.17c at yesterday's close) -- giving up earlier highs around A83.30c, 0.4931 euro (0.4945), 57.00 yen (56.99), 30.47 pence (30.59) and 0.7169 Swiss francs (0.7188).
The aussie was buying $NZ1.2039 ($NZ1.2030).
The monetary conditions index eased to minus 497 (minus 482), the trade weighted index was at 52.96 (53.13), and 90-day bank bills were at 5.80 per cent (5.78).
On the debt market, the April 2004 bond yields were at 6.15 per cent (6.12), the November 2006s were at 6.65 per cent (6.62), and the November 2011s were at 6.80 per cent (6.75).
- NZPA
<i>Currency:</i> Kiwi dips as US dollar bounces back into favour
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