The New Zealand dollar has ignored recent surveys showing waning investor and business confidence, but was on the alert for another out tonight.
The kiwi traded between US55.53/77c during the day and could push slightly higher overnight, one local dealer said.
"It was a very tight range. Lining up tonight we've got the National Bank Business Outlook.
"The number will be a good indication of probably why the Reserve Bank has cut interest rates, and may be indicative of what the market expects in terms of more cuts to the end of the year, starting in June."
The Reserve Bank cut its benchmark interest rate by 25 points last week to 5.50 per cent, hoping to insulate the domestic economy from effects of drought, severe acute respiratory syndrome, and a weak global outlook.
The kiwi has ignored figures out in the past two days which provided further evidence of a slowing economy - the ASB Bank's March quarter survey yesterday and the ANZ-Business NZ manufacturing index today.
The ASB survey revealed that just 8 per cent of respondents were positive about their future returns on investments, down from 18 per cent in the previous quarter.
Today's PMI showed New Zealand's manufacturing activity continued to expand in March, but at a slower rate than the previous month.
"(The PMI)'s never really a big mover of the currency, unless the figure's well out of whack ... so we didn't really see much of a market reaction to that at all," the dealer said.
The kiwi is currently finding support at US55.40c, while US55.80c was proving difficult to breach.
"Expectations are we will hold to range overnight - there's probably more of a risk to the top side if anything," he said.
At 5pm the kiwi was buying US55.74c, up from yesterday's close of US55.45c, while the Australian dollar was trading at US61.98c against its US61.74c close yesterday.
In Asian trade, a US stock rally, poor German economic news and a conditional North Korean offer to end its nuclear weapons programme buoyed the US dollar, but markets appeared unconvinced of its longer-term merits.
In Wellington at 5pm the euro eased to $US1.0996 compared with last night's $US1.1044, while the US dollar also eased to buy 119.93 yen (120.18).
On the crosses, the kiwi was buying A89.93c (A89.82c yesterday), 66.85 yen (66.95), 35.05 pence (35.01), 0.7635 Swiss francs (0.7642), and 0.5069 euro (0.5020).
The monetary conditions index strengthened to 168 (138), the trade-weighted index was at 60.81 (60.44) and 90-day bank bill yields were steady at 5.53 per cent.
The February 2005 yields were at 5.20 per cent (5.16), the November 2006s were at 5.38 per cent (5.34), and the November 2011s were at 5.82 per cent (5.75).
- NZPA
<i>Currency:</i> Kiwi looks out for confidence signal
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