The New Zealand dollar drifted lower today as its Australian counterpart took centre stage.
At 5pm the kiwi was at US55.77c, down from Friday night's close of US56.23c. The Australian dollar went the other way, rising to US60.68c (US60.55c).
"Kiwi is trading at the bottom end of a US55.71c-US55.99c range," a local dealer said.
"It spent the day slowly drifting lower. There seems to be continued interest in a correction of the (NZD-Australian dollar) cross - selling against the aussie seems to be the major interest there and that's really been the driving force for the kiwi's move lower."
The kiwi was buying A91.92c at 5pm from A92.87c at Friday's close, while the aussie improved to $NZ1.0777 ($NZ1.0755).
Dealers expected the local unit to test further downside overnight, trading in a US55.50c to US55.90c range.
"At this stage the aussie may be the deciding factor on whether we are able to go back up," the dealer said.
"If the aussie remains bid then that cross can move without us really moving as well, but if the aussie starts to peel off after the bad current account data today then obviously it might get a little bit messy."
Figures out today show Australia's current account deficit blew out to a record of almost $A12 billion ($NZ13.06 billion) in December as the impact of the drought, weak world demand and expensive aircraft imports took their toll.
The figure eclipses the previous record of $A9.1 billion, set in June 1999, and is a massive 40 per cent increase on the previous quarter, allowing for seasonal factors.
On the other crosses at 5pm the kiwi softened to 51.75 euro (52.25), 65.94 yen (66.16 yen), 35.44 pence (35.58), and 0.7566 Swiss francs (0.7645).
The trade-weighted index was at 61.22 (61.66), 90-day bills were at 5.76 per cent (5.79), and the monetary conditions index was at plus 223 (263).
On the bond market the April 2004 government bonds were at 5.35 per cent (5.35), the November 2006s were at 5.32 per cent (5.32), and the November 2011s were at 5.70 per cent (5.70).
- NZPA
<i>Currency:</i> Kiwi drifts lower as Aussie steals centre stage
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