The New Zealand dollar rode the back of a firmer aussie yesterday as Iraq's decision to allow in UN weapon inspectors lifted some of the fears for global growth.
During the day, the kiwi dollar rose to a high of US47.33c but ended the day at US47.07c, near its opening levels and Monday's close of US47.11c.
The Australian dollar closed at US54.92c, a little higher than its close Monday at US54.80c.
The Iraqi decision had lessened concerns about a US-led strike on the country, said one broker.
"It just takes away a risk factor in terms of the peripheral markets and risk aversion that may have been seen as inhibiting aussie and kiwi strength."
Back home, the kiwi dollar ignored a change in the Reserve Bank's inflation target range in the morning from its former zero to 3 per cent, to its new 1 to 3 per cent.
New Reserve Bank governor Alan Bollard said the new agreement would allow monetary policy to be more flexible and help avoid unnecessary instability in interest rates and the exchange rate.
The broker picked the kiwi to trade between US46.90c and US47.20c overnight.
On the crosses at 5pm the kiwi traded at A85.73c (A85.96c at Monday's close), 57.79 yen (57.46), 30.62 pence (30.40), 0.7173 Swiss francs (0.7129), and 0.4872 euro (0.4856).
The aussie was buying $NZ1.1665 ($NZ1.1634).
On the money market, 90-day bills were steady at 5.88 per cent, the trade-weighted index was at 54.31 (54.22) and the monetary conditions index was flat at minus 362.
The April 2004 bonds were at 5.72 per cent (5.63), the November 2006 bonds were at 6.06 per cent (5.97), and the November 2011 bonds were at 6.25 per cent (6.16).
- NZPA
<i>Currency:</i> Kiwi firm on dissipating war clouds
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