7.00pm
The kiwi drifted lower throughout the local session as the greenback regained some ground lost overnight.
At 5pm the kiwi was buying US68.36c from US68.65c at the same time last night, having traded in a US68.24c to US68.49c range today.
BNZ currency strategist Sue Trinh said the kiwi was struggling to to break through the US69c mark.
"One factor that has been inhibiting the kiwi's upside momentum has been the fact that the market has just become quite overweight the kiwi, not just against the US dollar but right across the board against all the crosses at the moment," she said.
This was reflected in the New Zealand dollar Trade-Weighted Index. The index, which measures the kiwi against the currencies of the country's five main trading partners, hit a seven-year high early today. The TWI rose as high 69.18 before the local currency market opened today, the highest it has been at since February 1997. It's all-time high was in mid-1988 when it reached 70.2. By 5pm the TWI had settled back to 68.85 compared with 68.94 at the same time yesterday.
The greenback recovered today from overnight weakness which was brought on by a report which showed a net $US59.0 billion flowed into US asset markets in August, compared with a downwardly-revised $63.1 billion in July.
With the US running record current account trade and budget deficits, the worry is that foreigners will not continue to plug these gaps indefinitely, suggesting further dollar weakness ahead.
Meanwhile, US consumer price data for September is due out overnight with the market expectin g a 0.2 percent increase in both the headline and core CPI. Core CPI strips out volatile food and energy costs.
Elsewhere, at 5pm today the Australian dollar was buying US72.40c (US73.09c at 5pm last night), the euro was buying $US1.2460 ($US1.2481) and the US dollar was buying 109.40 yen (109.29).
On the crosses the kiwi was buying A94.44c (A93.92c), 0.5487 euros (0.5500), 38.06 British pence (38.05), 74.80 yen (75.02) and 0.8443 Swiss francs (0.8466).
Meanwhile the monetary conditions index was at plus 912 (919).
In the money market, 90-day bank bill yields were unchanged at 6.76 percent. On the bond market, February 2006s were at 6.16 percent (6.17), July 2009s were unchanged at 6.03 percent and April 2013s were unchanged at 6.06 percent.
- NZPA
<i>Currency:</i> Kiwi drifts lower as greenback claws back lost ground
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