The New Zealand dollar eased slightly in local trading today after hitting a fresh five-year high last night but seemed little affected by last night's interest rate cut in the US.
At 5pm the kiwi was buying US58.41c, from US58.49c at 5pm yesterday, while its Australian counterpart was at US66.86c (US66.46c).
The kiwi's trading range today was a "very respectable" US58.39c to US58.63c, according to a local forex dealer who said today's session was a repeat of yesterday.
"Throughout the course of our day we've seen a little bit of supply against the aussie dollar. Generally it seems to be the local corporates have all been taking advantage of the levels that we've had over recent days," the dealer said.
"I think the kiwi's held up very well over the last few weeks with the euro doing what it's done. The euro's fallen four big figures and the kiwi's managed to stay pretty well bid, and we're just seeing a little bit of catch up as people have lightened their positions in the kiwi. But it's still holding up alright.
The dealer expected to see the kiwi trade in a range of US58.30c to US58.80c tonight, "a repeat performance of last night really".
"Overall, I think the kiwi will probably continue to be a good buy around the US58.30 level and we'll probably get another good look up towards US59c at some stage in the next 24 hours."
Last night the US rate-setting Federal Open Market Committee (FOMC) trimmed the federal funds rate for overnight loans between banks to 1 per cent, the 13th rate reduction since early 2001, to nurse the US economy back to health. But there was "not a hell of a lot" of effect on the kiwi today, the dealer said.
"There was a little bit of US dollar buying after the fact that they only did a quarter against the 50 expected."
There was potential for the euro to strengthen tonight in reaction to the US rate cut which could flow on to the aussie and kiwi, he said.
In Wellington at 5pm the euro strengthened to $US1.1530 ($US1.1521 at 5pm yesterday), while the greenback was buying 118.15 yen (117.57).
On the crosses the kiwi was buying A87.37c (A88.01c at yesterday's close), 69.01 yen (68.77), 34.96 pence (35.14), 0.7774 Swiss francs (0.7762), and 0.5066 euro (0.5077).
The monetary conditions index was at plus 227 (233), the trade-weighted index was at 61.86 (61.98) and 90-day bank bill yields were at 5.27 per cent (5.24).
The February 2005 yields were at 4.93 per cent (4.77), the November 2006s were at 4.98 per cent (4.80), and the November 2011s were at 5.31 per cent (5.11).
- NZPA
<i>Currency:</i> Kiwi little affected by US rate cut
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