The New Zealand dollar traded quietly on the local market yesterday but clung to the 11-week highs it gained overnight from Thursday.
At 5pm the kiwi was at US47.68c, up from Thursday's close of US47.50c, while the aussie rose to US54.65c (US54.44c).
During the kiwi traded in a tight 10-point range of US47.65/75c, with importers taking advantage of the stronger exchange rate.
But the kiwi outperformed both the yen and the aussie, and all eyes were focused on the overnight offshore trade, where the New Zealand dollar has found fresh demand in the last few days.
"There's talk of it being related to the recent change in the Telecom ownership structure, there was a euro-kiwi issue the other night for $200 million...Cullen's talking to investor houses in the US, there's just a bit of interest in New Zealand at the moment," said Earl White, a director of Bancorp Treasury Services.
Mr White said the big question now was whether the kiwi's rise could be sustained in a volatile overseas climate.
"The interesting thing is, we couldn't do this a month ago, when the euro went to parity, we couldn't do it when the aussie dollar was above US55c. Now both of those currencies aren't doing as well against the dollar as we are, so it's sort of a New Zealand dollar thing at the moment."
In his daily commentary, Bank of New Zealand currency strategist Stu Ritson said the break higher was positive "but we continue to respect the robust technical resistance at US48c, and suggest that the New Zealand dollar will find increasing headwinds up towards this level".
Dealers forecast overnight support for the kiwi around US47.50c and resistance at US48c.
A supressing factor could be fresh United States employment data out overnight.
On the crosses at 5pm the kiwi strengthened against its trading partners, trading flat at A87.26c, 58.57 yen (58.36 at Thursday's close), 0.3038 pence (0.3028), 0.7059 Swiss francs (0.7026), and 0.4834 euro (0.4815).
The aussie was buying $NZ1.1463 ($NZ1.1480).
The 90-day bills were little changed at 5.88 per cent, the trade-weighted index was at 54.74 (54.57), and the monetary conditions index tightened to minus 324 (minus 339).
Among the longer-dated bonds, the April 2004 bond yields were unchanged at 5.63 per cent, the November 2006 bonds were flat at 5.92 per cent, and the November 2011 bonds were at 6.14 per cent (6.11).
- NZPA
<i>Currency:</i> Kiwi holds fast to overnight gains
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