The New Zealand dollar eased within a tight range yesterday and shared the light volumes seen in other currencies amid caution over further euro intervention.
The kiwi finished at US41.39c having traded between US41.35 and US41.45c.
"The market is still really focusing on movements in the euro after last Friday's intervention," Jon Clarke, a director of Treasury consultancy Greenwich Financial Services, said.
No further buying by the various central banks was evident yesterday and the euro was fairly steady, closing around US88.50c. A local dealer said on Tuesday intervention was likely below US87c.
But Mr Clarke said that while intervention had forced caution on speculators, nonetheless natural flows of capital from Europe to the US continued - people could not delay business deals. So G7 banks face that ongoing problem and it would probably take weeks if not months to effect the orderly reversal they seek.
"No one is willing to push the euro lower," Mr Clarke said, noting the market awaited the next test of the resolve of euro defenders.
While the euro and Australian dollars remain the main factor for the kiwi, tomorrow's June quarter gross domestic product could spark further despondency. If the anticipated contraction comes in much weaker than expectations of 0.5 per cent, worries about the current September quarter will be heightened.
On the crosses, the kiwi was at A75.42c.
- NZPA
<i>Currency:</i> Kiwi eases as world eyes euro
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