The New Zealand dollar was dragged around by its usual dance partner, the Australian dollar, for a brief period yesterday. The kiwi ended the week at an unremarkable 39.96USc, having recovered slightly from weakness overnight also in line with the aussie.
"It's been a relatively quiet day. Very reflective of aussie movements across the course of the day - aussie play was behind the sharp move, it dropped 30 or 40 points and decided to rally 50 points, so the kiwi did exactly the same," a dealer said.
"Volumes have been very low. With the US Thanksgiving holiday you would expect it to be a little bit quiet, and I think some people are trying to figure out what the next direction is going to be after some pretty substantial moves, and then pretty reasonable sized corrections, over the week."
The steady day followed a hectic day's trade on Thursday with rumours of a mystery shopper buying up the aussie, sparking a renewed burst of interest in both the kiwi and the aussie.
The buyer purchased around $A1 billion of short-dated call options on the Australian dollar, believed to have a 51.50USc strike, on Wednesday afternoon. This was followed by a round of large bank buying in New York.
Dealers were divided as to the identity of the buyer, rumoured to be either the Reserve Bank of Australia or the National Australia Bank.
- NZPA
<i>Currency:</i> Kiwi eases after volatile week
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