The New Zealand dollar took advantage of the United States dollar's increasingly friendless position to close above US55c yesterday.
By 5pm the kiwi was at US55.16c, well up on Tuesday night's close of US54.42c. The Australian dollar, boosted by a US$1 billion uridashi (Australian bonds denominated in yen) bond issue, jumped to US59.33c compared with its US58.48c close on Tuesday.
Bank of New Zealand chief currency dealer Mike Symonds said the kiwi had taken advantage of continued pressure on the US dollar.
"One of the things that's certainly been a catalyst for some of the strength we've seen in the last 24 hours has been notable yield-related demand from the Asian market in the kiwi, and that's pushed the kiwi back up to the US55c area."
The kiwi traded between US54.87c and US55.13c today, and it was looking ready to take on the US55.40c level again later this week.
"Everything's really changed, the dips have been very short-lived and have been very shallow indeed," Mr Symonds said.
New Zealand markets are closed today for the Waitangi Day holiday.
Following an article in the Los Angeles Times which spooked investors by saying the timetable for war was under six weeks, the US dollar was trading at 119.58 yen compared with 120.33 at 5pm yesterday. The euro strengthened to US$1.0889, compared with US$1.0774.
The greenback has found little favour ahead of the much-awaited address by US Secretary of State Colin Powell to the United Nations Security Council.
On the crosses, the kiwi was buying A92.92c (A93.10c at yesterday's close), 0.5061 euro (0.5055), 65.91 yen (65.62 yen), 33.37 pence (33.13) and 0.7405 Swiss francs (0.7411).
The Australian dollar was buying $1.0761 ($1.0747).
New Zealand's trade-weighted index was at 60.54 (60.12), 90-day bank bills were at 5.84 per cent (5.86) and the monetary conditions index was at plus 177 (142).
Tuesday's strong rally on the bond market continued yesterday, with the April 2004 government bonds at 5.49 per cent (5.51), the November 2006s at 5.58 per cent (5.60), the November 2011s at 5.86 per cent (5.92), and the April 2013s at 5.88 per cent (5.95).
- NZPA
<i>Currency:</i> Kiwi forges about US55c
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