The New Zealand dollar firmed against the US dollar today despite solid US economic data, but remained stuck in the US61.50-US62.50c range it has traded this month.
It closed on US62.42c from US62.13c at the same time yesterday.
The NZ dollar eased against the Australian currency to A84.06c from A84.14c while the trade-weighted index finished on from 62.80 from 62.68.
ANZ Investment Bank chief dealer Murray Hindley said the kiwi had risen on short covering. He doubted the kiwi would break out of its recent range until the current account data on Thursday and GDP data the following day.
The current account is expected to show a March year deficit of $14 billion, or 9 per cent of GDP, while the economy is picked to have grown 0.7 per cent in the March quarter.
Any worse figures were likely to see the kiwi sold, Mr Hindley said.
"If both are weak, then you will see pressure on for the kiwi to fall below US61.50c," he said.
The US dollar fell from seven-week highs struck against the euro and yen this week as a rebound in global stock and commodity prices lured funds away from the US currency.
Data the previous session showing solid US regional manufacturing activity relieved doubts about the outlook for US and global growth, helping riskier assets recover from their sharp sell-off since mid-May.
Asian stock indexes jumped more than 2 per cent across the board, with Japan's Nikkei share average gaining 2.8 per cent. Gold surged more than US$10 ($16.28) to US$580.25.
Such renewed confidence in the US and global economy may take a toll on the US dollar, which had benefitted from investors moving funds into safer havens such as US money markets and government bonds, analysts said.
It looked like money was switching back to riskier assets, said Richard Yetsenga, currency strategist at HSBC in Hong Kong.
Worries about building inflationary pressures had convinced market players that the Federal Reserve would raise rates for a 17th straight time this month, taking the fed funds rate to 5.25 per cent, and was more likely to tighten credit again in August.
Rates:
5pm today 5pm Thursday
NZ dlr/US dlr US62.42c US62.13c
NZ dlr/Aust dlr A84.06c A84.14c
NZ dlr/euro 0.4938 0.4931
NZ dlr/yen 71.46 71.48
NZ dlr/stg 0.3371 0.3373
NZ TWI 62.80 62.68
Australian dollar US74.27c US73.85c
Euro/US dollar US1.2644 US1.2605
US dollar/yen 114.72 115.02
- NZPA
<i>Currency:</i> Kiwi firms against Greenback
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