The New Zealand dollar was dragged up towards the US47c mark yesterday by a stronger aussie, although it is unlikely to be able to break through that level in the forseeable future.
At 5pm the kiwi traded at US46.85c, an improvement on its close on Thursday at US46.25c. The Australian dollar also strengthened, trading at US54.52c, compared with US53.88c yesterday.
Phil Lindberg of Deutsche Bank said the kiwi remained above its key resistance levels of US46.80c.
"It's sitting quietly. Overall it's been a pretty quiet day, I guess given the announcements during the week, we'll wait and see what happens tonight."
The US Federal Reserve and the Reserve Bank of New Zealand both left interest rates unchanged during the week but warned of the shaky international economic outlook.
"The US data has been weak and if anything the markets are looking for rate cuts, so it's therefore positive for aussie and kiwi on the growth side," Mr Lindberg said.
"The aussie broke through its resistance and has kicked on again today -- it's sitting on its highs and that's dragged the kiwi up with it.
"Both look relatively positive if they can kick on from here.
"I think we'll see what happens on Wall St, but both kiwi and aussie look like they'll test higher from here," he said.
Bank of New Zealand currency strategist Stuart Ritson said the improved performance by US equities had eased growth concerns, and seen risk aversion reduce somewhat.
"That said, the macro environment is not overly supportive of the New Zealand dollar and we would expect a period of consolidation around current levels," Mr Ritson said.
He picked strong kiwi resistance at US47.00c, and support at US46.30/40c.
In offshore trade, the greenback firmed slightly yesterday on a mild rise in Wall St share prices but failed to capitalise on its advance because of simmering concerns about the US economy.
On Thursday, disappointing United States manufacturing data raised fresh concerns about the country's faltering economic recovery.
Two reports -- a closely watched business outlook index and monthly industrial production numbers -- suggested the recovery in factory activity was flagging, economists said.
On the crosses at 5pm, the kiwi was buying A85.93c (A85.66c at last night's close), 55.11 yen (54.50), 30.54 pence (30.20), 0.6982 Swiss francs (0.6928), and flat at 0.4777 euro.
The aussie was trading at $1.1644 ($1.1646).
On the money market, 90-day bills were flat at 5.87 per cent, the trade-weighted index was at 53.47 (52.98) and the monetary conditions index tightened to minus 440 (minus 486).
On the debt market, the April 2004 bonds were at 5.72 per cent (5.70), the November 2006 bonds were at 6.10 per cent (56.07), and the November 2011 bonds were at 6.34 per cent (6.29).
- NZPA
<i>Currency:</i> Kiwi dragged higher by stronger Aussie
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