The New Zealand dollar gave up some of its recent gains today after it touched a fresh three-week high overnight.
It had been buoyed by yesterday's unexpectedly strong trade data and strong demand for the Australian dollar which was underpinned by fresh buying of gold.
At 5pm the kiwi was buying US63.70c, down from its US64.18c overnight high but still up on the US63.41c local close yesterday. Statistics New Zealand reported a surprise $19 million trade surplus for April, confounding local economists who had predicted a $180 million deficit.
The data gave hope that the current account may retreat from its lofty levels around 9 per cent of GDP sooner than expected.
"The New Zealand dollar now looks to be repricing economic developments in a similar manner to the New Zealand bond market, which has been heading down the 'no rate cuts in 2006' route," ANZ Investment Bank strategists said.
ANZ said a May 3 high of US64.45c was now in sight.
The Australian dollar also eased back to close on US75.87c after it gained US1c from US75.14c at yesterday's local close. The kiwi cross rate eased to A83.98c from A84.39c and the trade-weighted index ended on 63.39 against 63.27.
Activity in major currency markets was cautious ahead of key inflation data that could provide clues about whether the Federal Reserve will raise interest rates again next month.
After tumbling to one-year lows last week against the euro and sterling and eight-month troughs versus the yen, the US dollar got respite this week from erratic moves in emerging markets amid a lack of fundamental data to trade on.
"There is risk aversion due to the collapse of the emerging markets in the past week," said Toru Umemoto, chief forex strategist at Barclays Capital in Tokyo.
"Basically there is no clear direction," he added.
Rates:
5pm today 5pm Thursday
NZ dlr US63.70c US63.41c
NZ dlr/Aust dlr A83.98c A84.39c
NZ dlr/euro 0.4990 0.4971
NZ dlr/yen 71.50 71.48
NZ dlr/stg 34.09 33.94
NZ TWI 63.39 63.27
Australian dollar US75.87c US75.14c
Euro/US dollar US1.2769 US1.2755
US dollar/yen 112.21 112.75
- NZPA
<i>Currency:</i> Kiwi gives up gains after hitting high
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