The dollar closed on a 16-month high yesterday after the Reserve Bank of Australia's interest rate rise provided a boost for the Australian dollar.
By 5pm the kiwi rose to US45.16c from US45c at yesterday's close, while the aussie was at US54.13c (US54.15c).
The aussie hung about this morning after the rate hike before eventually bouncing higher, dragging the kiwi along, one local dealer said.
The RBA today lifted the cash rate to 4.50 per cent from 4.25 per cent, its first rate rise since August 2000. Earlier, the US Federal Reserve left rates unchanged at 1.75 per cent -- a 40 year low.
The dealer said that Finance Minister Michael Cullen's announcement today that the 2001/02 budget surplus would be 50 per cent above Treasury's last formal forecast was positive, but had little impact on the kiwi.
The kiwi traded between US44.86c and US45.25c during the day. It was likely to retrace overnight to US44.90c if it did not break through US45.25, its highest level since January 2001. Its next cap above US45.25c was US45.50c, the dealer said.
Support for kiwi remained about US44.80/90c.
On the crosses at 5pm the kiwi was at A83.16c (A83.13c at yesterday's close), 0.4943 euro (0.4903), 57.81 yen (57.14), 30.82 pence (30.65) and 0.7194 Swiss francs (0.7127).
The aussie was buying $NZ1.2025 ($NZ1.2032).
The monetary conditions index tightened to minus 454 (minus 484), the trade weighted index was at 53.44 (53.13), and 90-day bank bills were at 5.77 per cent (5.76).
On the debt market, the April 2004 bond yields were at 6.08 per cent (6.06), the November 2006s were at 6.60 per cent (6.53), and the November 2011s were at 6.77 per cent (6.71).
- NZPA
<i>Currency:</i> Kiwi hits 16-month high
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