The New Zealand dollar dipped below US55c today as investors sold off the local unit in favour of its Australian counterpart.
By 5pm the kiwi was at US54.90c from US55.29c at yesterday's close. On the Australian dollar cross rate it dipped to A91.94c (A92.74c).
The Australian unit rallied to US59.72c (US59.62c) and $NZ1.0878 ($NZ1.0786).
The aussie touched its highest level against the US unit since March 15 today after a grinding one-cent rally over the past few days, battling against bursts of US dollar buying on any sign of progress in the US-led offensive on Iraq.
By contrast, the kiwi came under pressure on concerns the strength of the New Zealand dollar is choking the economy.
A report by private forecaster Business and Economics Research Ltd (BERL), released today, expects the kiwi dollar to lose its 100 -basis-point yield advantage over the aussie during 2003 with New Zealand's 5.75 per cent official cash rate being cut to halt the kiwi's rise.
That saw the AUD/NZD cross touch a two-week high of $NZ1.0881 early in the day .
The likelihood of an electricity supply shortage is also seen as weighing on the kiwi, longer term.
Investors will be eyeing balance of payments data due out tomorrow and Gross Domestic Product data due on Friday for further direction, dealers said.
The US dollar remains the dominant influence in an edgy market, however.
On the other main crosses at 5pm the kiwi softened to 0.5154 euro (0.5176), 34.85 pence (35.03), 0.7589 Swiss francs (0.7633) and 65.84 yen (66.28).
On the money market, 90-day bills were steady at 5.86 per cent, the monetary conditions index was at plus 194 (plus 228), and the trade-weighted index was at 60.74 (61.15).
Among the bonds the April 2004s were at 5.56 per cent (5.55), the November 2006s were at 5.67 per cent (5.67) and the November 2011s were at 6.12 per cent (6.16).
- NZPA
<i>Currency:</i> Kiwi dips on rallying aussie
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