The New Zealand dollar fell in thin, patchy trade but bounced back by the end of the day.
The kiwi was trading at 44.84USc about 5 pm, up from yesterday morning's open of 44.74c but well off Friday's close of 45.22c.
One dealer said the currency market was fairly slow because Wellington Anniversary Day meant a partial market holiday.
The kiwi had recovered after tracing the euro lower in overseas markets on Friday night, as the European unit took a battering against the yen and the US dollar. The euro was trading at 93.64USc about 5 pm, and the Australian dollar was at 55.64USc.
"It [the kiwi] basically followed the aussie down on the low side, the market obviously reacting after profit-taking through all the currencies in New York on Friday," the dealer said.
"But it found some steady demand there at 44.60c, and both currencies bounced back quite quickly in a very thin market. The bounceback was quite pronounced, so I think it underscores that the kiwi had some good demand at 44.60c, which was also Friday's low."
The market would be all ears tomorrow when the Reserve Bank released its decision on its official cash rate, said the dealer.
Market expectation was for the bank to leave its rate, currently 6.50 per cent, unchanged.
"If the central bank holds rates, I think it will underpin the kiwi even further, and we're going to do quite well on a trade-weighted basis and do quite well against a number of crosses.
"If it did cut rates, the kiwi would drop very sharply to the very low 44USc level. To me, the anticipation is it won't do that."
Late last month, economists were tipping the Reserve Bank to raise rates by 25 basis points in March, but that is seen as less likely following the surprise US rate cut this month.
- NZPA
<i>Currency:</i> Kiwi falls in patchy trading
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