The New Zealand dollar found renewed strength on the back of a United States sharemarket rally yesterday which helped both the southern currencies.
At 5pm the kiwi was at US46.85c, peaking at US47.05c, from last night's close of US46.35c. The aussie also gathered strength, trading at US54.30c today from US53.68c on Monday.
"It's clawed its way up to the US47.90c figure a few times and keeps getting bashed back, so there do seem to be sellers around the US47c area," said a senior ANZ Investment Bank dealer.
During the day the kiwi dollar followed the aussie higher on solid volumes, consolidating gains it made overnight as US equities and currency firmed.
The kiwi moved by more than 1 per cent, despite a stronger greenback and euro, as Wall St largely disregarded an announcement from telecommunications giant Qwest Communications that it had improperly booked $US1.16 billion ($NZ2.50 billion) in its accounts.
Today the US dollar also flexed its muscles against the yen at 120.11 (compared to 119.12 Monday) while the euro weakened at 0.9805 (0.9871).
Dealers said the kiwi and aussie rally was viewed as a corrective move, but there was potential for further downside to US46c or below.
"It's a very nervous market at the moment. It's moving significantly on very light flows ... it's very hard to shift amounts," said the dealer.
Overnight, he picked the kiwi to trade in a range between US46.70c/47.10c.
On the crosses, the kiwi traded at A86.30c (A86.40c at Monday's close), 56.28 yen (55.22), 0.2996 pence (0.2961), 0.6966 Swiss francs (0.6804) and 0.4778 euro (0.4696).
The aussie was buying $NZ1.1589 ($NZ1.1575).
On the money market, 90-day bills were flat at 5.96 per cent, the trade-weighted index was at 53.69 (53.05) and the monetary conditions index tightened to minus 413 (minus 472).
On the debt market, the April 2004 bonds were at 5.61 per cent (5.58), the November 2006 bonds were at 6.26 per cent (6.19), and the November 2011 bonds were at 6.49 per cent (6.42).
- NZPA
<i>Currency:</i> Kiwi hitches ride with Aussie
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