The New Zealand dollar rebounded after a slight fall when the United States launched its attack on Iraq today.
By 5pm, the kiwi was up slightly at US55.02c from US54.83c last night. The aussie gained ground to US59.25c from this morning's US59.01c, and was little changed from last night's US59.30c.
One local dealer said the aussie underpinned the kiwi today.
"Both the aussie and kiwi held ground today, the US dollar just got sold off a wee bit later.
"The kiwi seems to be holding the US54.80c area at the moment, and sellers seem to emerge when it gets to US55.20c. We haven't been up there yet but we may see something tonight," he said.
The kiwi traded between US54.77c and US55.07c today.
Bank of New Zealand currency strategist Stu Ritson said the kiwi began the day underpinned by comments yesterday by Reserve Bank Governor Alan Bollard that there was no evidence yet of an economic slowdown that would warrant a rate cut.
Dr Bollard also didn't express any concern about the level of the New Zealand dollar, saying it was "not out of line with long-term average values".
Today, Finance Minister Michael Cullen said in a speech that the Government was not going to "lose its nerve" and alter fiscal or monetary settings despite a troubled international scene.
In offshore trade, the greenback fell from its highs against major currencies in volatile trade after the widely anticipated US-led war on Iraq began during Asian trading hours.
The US dollar came under pressure after US President George W Bush said that the war could be longer and more difficult than some had predicted.
By 5pm, the euro had slipped to $US1.0592 in Wellington from $US1.0633 yesterday and $US1.0813 at Monday's close, while the US dollar rallied to 119.99 yen (118.69 yesterday).
On the 5pm crosses, the kiwi was buying A92.87c (A92.47c), 0.5195 euro (0.5156), 0.7652 Swiss francs (0.7586), 66.02 yen (65.09), and 35.18 pence (35.02).
The Australian dollar was at $NZ1.0788 ($NZ1.0809).
On the money market, 90-day bills were at 5.85 per cent (5.87), the monetary conditions index was at plus 213 (190), and the trade-weighted index was at 60.97 (60.67).
Among the bonds, the April 2004s were at 5.63 per cent (5.57), the November 2006s were at 5.75 per cent (5.66) and the November 2011s were at 6.16 per cent (6.04).
- NZPA
<i>Currency:</i> Kiwi holds ground as US launches attack on Iraq
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