The New Zealand dollar held steady against most currencies today, although it made ground against the Australian dollar, which was sold after weak trade data.
The kiwi closed on US61.75c, little changed from yesterday's close of US61.80c.
Dealers said there was very little news on the local scene to excite the market so attention turned to Australia which posted its 50th consecutive monthly trade deficit.
The figures showed a collapse in exports and a surge in imports during May, with the country running up a deficit of A$2.3 billion ($2.8 billion). Economists said the deficit raised questions about the state of the economy.
The Australian dollar lost half a cent from yesterday to end locally on US75.08c. The kiwi cross rate gained almost as much, finishing on A82.25c from A81.82c yesterday.
Economists said there was a growing view that the Reserve Bank will hold off cutting local interest rates until the middle of next year. Bank governor Alan Bollard, in a speech yesterday, noted that monetary policy seemed to be working now, as interest rates around the world rose to meet New Zealand's rates.
The economy was coming into balance as exporters benefited from a lower currency and the domestic sector was pegged back, he said.
The New Zealand trade weighted index ended on 62.06 against yesterday's close of 61.98.
All eyes trading major currencies were on the yen ahead of the Bank of Japan's widely expected increase in interest rates.
At the end of its two-day meeting, the central bank is forecast to boost the overnight call rate to 0.25 per cent, the first hike in six years and ending an era of zero rates aimed at fighting off deflation.
But such an outcome would not likely prompt big buying of the yen, traders said, because the gap between Japanese rates and those in the United States and the euro zone would remain huge, favouring the dollar and the euro.
The yen was sold against the dollar and euro and by 0245 GMT, the dollar was up nearly half a per cent at 115.85 yen.
"Market players know that yield gaps will not narrow much even after the BOJ ends its zero-rate policy," said a trader at a big Japanese bank. "Many investors want to buy the dollar given the yield difference."
The following are Reuters currency rates:
5pm today 5pm Thursday
NZ dlr US61.75c US61.80c
NZ dlr/Aust dlr A82.25c A81.82c
NZ dlr/euro 0.4865 0.4862
NZ dlr/yen 71.48 71.28
NZ dlr/stg 33.52p 33.66p
NZ TWI 62.06 61.98
Australian dollar US75.08c US75.52c
Euro/US dollar US1.2691c US1.2715c
US dollar/yen 115.74 115.33
- NZPA
<i>Currency:</i> Kiwi holds steady, gains on Australian
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