Liquidity was on the thin side in the foreign exchange market today, as the kiwi continued to trade in a tight range, a broker said.
At 5pm today in Wellington the kiwi was at US65.99c from (US65.24c at 5pm on Friday), having traded in a US65.90c to US66.10c range.
Westpac currency strategist Johnathan Bayley said the kiwi generally followed the Australian dollar today.
The kiwi was buying A89.90c at 5pm (A90.21c at 5pm Friday), and the the Australian dollar was at US73.41c (US72.33c).
Mr Bayley said the kiwi peaked just above US66c around midday, but fell away in the wake of a rumour floating around that Osama bin Laden had been caught, which caused a short rally for the greenback.
"That was good for a small and quick (US) dollar rally, just as a kneejerk. But I don't think anyone took it so seriously they actually got into serious dollar buying."
The US dollar had fallen on Friday against other major currencies, hitting a four month low against the euro, following the release of the latest US consumer price index.
US consumer prices rose 0.3 per cent in June, compared with forecasts for a 0.2 per cent increase, but core inflation, minus volatile food and energy prices, was more muted than expected.
That reinforced market views the US Federal Reserve can, for now, honour its pledge to be measured as it hikes interest rates to keep the economy from growing too quickly and sparking high inflation.
At 5pm today the euro was buying US$1.2456 (US$1.2344), while the greenback was buying 108.16 yen (109.47).
On the other crosses, the kiwi was buying 35.19 British pence (35.22), 0.5298 euro (0.5275), 71.37 yen (71.44), and 0.8080 Swiss francs (0.8053).
Ninety-day bank bill yields were at 6.25 per cent (6.26 per cent), February 2006 bonds were at 5.98 per cent (6.01), July 2009s were at 6.03 per cent (6.08) and April 2013s were at 6.10 per cent (6.16).
The monetary conditions index was at plus 646 (619), while the trade-weighted index was at 65.97 (65.70).
- NZPA
<i>Currency:</i> Kiwi firmer in thin trading
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