The New Zealand dollar was rangebound yesterday, but it managed to close on its highs.
At 5pm the kiwi traded at US41.85c, exactly where it closed on Monday night, while the aussie rose to US51.44c, from Monday's US51.34c.
One local dealer said the kiwi traded between US41.70/85c during the day, maintaining its position on the back of a stronger aussie.
"By the same token, the ranges have been very small, and reasonably light, so it doesn't feel like it's getting away with itself," he said.
"A gut feel says that this is a rangebound market. I think it's going to be a break in the currency markets full stop, because if you look at the ranges in all currency pairs they are very tight, and they are very thin."
On the local front, Thursday is the big day with the December quarter Producers Price Index, January merchandise trade figures and the National Bank Business Outlook due out.
The dealer said the markets should concentrate on domestic data that shed light on New Zealand's growth, rather than inflation-related figures, such as the PPI. Housing data was also key, following the surprisingly positive figures from the US overnight.
Motivated by low mortgage rates and increasing confidence in the economy, Americans drove up sales of previously owned homes to a monthly record in January.
US Federal Reserve chairman Alan Greenspan's annual testimony to the US Congress today will hog the limelight, although he was likely to maintain a gently optimistic tone.
Also important will be comments from Japan tomorrow revealing an economic package to tackle the country's deflation.
However, Japanese Financial Services Minister Hakuo Yanagisawa all but admitted yesterday the government's anti-deflation plan would not include the measure that markets have been waiting for - an injection of public money into ailing banks.
On the crosses at 5pm, the kiwi traded at A81.35c (A81.46c at Monday's close), while the aussie was buying $NZ1.2295 ($NZ1.2266).
Against the other major currencies the kiwi was at 55.99 yen (55.98), 29.33 pence (29.24), 0.7097 Swiss francs (0.7077), and 0.4810 euro (0.4785).
The trade weighted index was at 51.05 (51.00), the monetary conditions index was at minus 761 (minus 767), and 90-day bank bills were at 4.98 per cent (4.97).
On the debt market, the March 2002 bonds were unchanged at 4.74 per cent, the April 2004 bonds were at 5.69 per cent (5.61), the November 2006s were at 6.33 per cent (6.27), and November 2011s were at 6.59 per cent (6.52).
- NZPA
<i>Currency:</i> Kiwi holds firm on day's highs
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