The New Zealand dollar had looked set to return to its upward trend but spent yesterday lying low, in line with last week's downside consolidation.
The kiwi closed at US49.75c, improving on Friday's close of US49.62c, but easing from its early start around US49.95c and a session high of US50.02c.
It closely followed the moves of its Australian counterpart, which closed at US55.99c (US56.14c on Friday).
Dealers attributed yesterday's lack of uplift to a spell of profit-taking but said the Australasian currencies were well bid.
"(There's) certainly no reason for it to go down," said one dealer.
BNZ currency strategist Stu Ritson echoed those comments.
"The unwinding of the long positional skew over the past week leaves the New Zealand dollar better placed to resume the uptrend although a further period of consolidation seems to be the most likely scenario with continued supply expected initially at US50c and then in the US50.45c region."
The kiwi was tipped to range between US49.55c and US50c overnight.
Backing this was positive data from the manufacturing sector. The ANZ-Business NZ Performance of Manufacturing Index showed that in October, New Zealand manufacturing expanded to 61.5, from 60.5 in September.
A reading above 50 on the index indicates manufacturing is expanding, while a reading below 50 indicates a decline.
This week the market is closely watching Wednesday's ANZ commodity price index and the value of building work statistics on Thursday for a steer on gross domestic product (GDP) figures.
Offshore, the greenback was enjoying a one-month high against the yen in Asian trade, with some traders predicting it could hit 125 yen this week. This was helped by reports that Japan's finance minister saw the yen as overvalued at current levels, and a positive start to the US Christmas shopping season.
At 5pm in Wellington, the dollar was buying 123.37 yen (122.31 yen on Friday).
Compared with Friday, the kiwi rallied against most major trading partners, buying A88.86c (A88.43c), 0.5013 euro (0.4993), 61.37 yen (60.69), 31.97 pence (31.99), and 0.7403 Swiss francs (0.7368).
The Australian dollar eased to $NZ1.1253 ($NZ1.1307).
The trade weighted index was at 56.88 (56.61), the monetary conditions index was at minus 126 (minus 150), and the 90-day bank bill yield was 5.91 per cent (5.93).
On the bond market, the April 2004s were at 5.75 per cent (5.73), the November 2006s were at 6.03 per cent (6.01), the November 2011s were at 6.41 per cent (6.38), and the April 2013s were at 6.46 per cent (6.43).
- NZPA
<i>Currency:</i> Kiwi lays low but market still looks for upturn
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