The New Zealand dollar failed to move out of its broad range yesterday, drifting down from a short-term overnight gain on weaker United States equities.
By 5pm the local unit was flat with Thursday's close of US47.25c, but outclassed its Australian counterpart, which fell to US54.90c (US55.02c).
"It had a good run overnight and effectively got itself a little bit long ... we've seen some good selling today," said one dealer.
The kiwi, which has been hovering between US47.50/46.50c for some time, was capped at US47.50c and dipped to US47.21c.
Dealers said the New Zealand currency had gone well in the last two weeks but while equities and concerns about global growth came under pressure, they would continue to weigh on the unit.
The greenback was hurt by reports showing US housing starts fell 2.2 per cent in August - the third consecutive monthly decline - while weekly jobless claims, although lower, were still higher than market expectations.
Overnight the broker was predicting support for the kiwi around US47.15c and resistance at US47.60c. "People still want to buy it - the only thing holding it back is the aussie."
He said the kiwi-aussie cross was straddling the A86c mark but it had difficulty getting past a technical barrier of A86.30c. Yesterday it closed at A85.97c (A85.87c Thursday).
Against its other major trading partners, the kiwi closed at 57.90 yen (57.57), 30.47 pence (30.49), 0.7008 Swiss francs (0.7073), and 0.4793 euro (0.4833).
The aussie was buying $NZ1.1635 ($NZ1.1644).
On the money market, 90-day bills were little changed at 5.87 per cent (5.86 per cent), the trade-weighted index was at 54.18 (54.24) and the monetary conditions index tightened to minus 375 (minus 369).
Longer bond yields fell slightly after a big rally in the last two days. The April 2004 bonds were at 5.59 per cent (5.64), the November 2006 bonds were at 5.87 per cent (5.94), and the November 2011 bonds were at 6.07 per cent (6.13).
- NZPA
<i>Currency:</i> Kiwi drifts down after shortlived growth spurt
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