The New Zealand dollar closed slightly firmer today after the US dollar weakened as investors hunkered down for a prolonged war with Iraq.
By 5pm the kiwi was at US55.29c from US55.21c at yesterday's close. Its Australian counterpart was at US59.62c (US59.43c).
The US dollar fell sharply in New York and Asia as signs US-led forces were running into more resistance in Iraq shook investors' belief that the war would be finished quickly.
The US dollar dropped more than 1 per cent against the euro and the Swiss franc in New York, and dropped below 120 yen in Asia after a special Bank of Japan meeting underpinned the yen by leaving monetary policy unchanged.
Dealers said the kiwi is in for more volatility yet, however, with the local economy beginning to show signs it is not bullet proof.
Data out today showed consumer confidence sagged to a 2-1/2 year low in the March quarter. The Westpac-McDermott Miller Consumer Confidence index dipped to 112.1 in March from 119.4 in the December quarter.
Investors will eye current account and merchandise trade data on Thursday and Gross Domestic Product data on Friday for further signs the economy is slowing.
The figures are all backward-looking, however, and overseas events are likely to continue to dominate kiwi movements, dealers said.
On the crosses at 5pm the kiwi was buying A92.74c (A92.90c yesterday), 0.51.76 euro (0.5205), 35.03 pence (35.24), 0.7633 Swiss francs (0.7679) and 66.28 yen (66.78). The Australian dollar was at $NZ1.0786 ($NZ1.0765).
On the money market, 90-day bills were at 5.86 per cent (5.85 per cent), the monetary conditions index was at plus 228 (plus 240), and the trade-weighted index was at 61.15 (61.31).
Among the bonds the April 2004s were at 5.55 per cent (5.60), the November 2006s were at 5.67 per cent (5.72) and the November 2011s were at 6.16 per cent (6.16).
- NZPA
<i>Currency:</i> Kiwi firms slightly as war fears dominate
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