The New Zealand dollar lost ground yesterday along with the Australian dollar, after a small rise overnight, and looked like it may continue to fall.
At 5pm the kiwi traded at US42.24c, a hair below its US42.25c close on Tuesday. The Australian dollar slid further, closing in Wellington at US51.64c from yesterday's close of US51.85c.
One local dealer said turbulent times may be ahead for the kiwi.
"It's looking a bit sad. The aussie's approaching some big levels (against the US dollar), which could open up the kiwi."
That could mean a slide overnight, he said. The kiwi's range yesterday was US42.18/25c.
The aussie broke through solid support at US51.75c during the day, and is headed towards US51.60c, with US51.40c the next key level.
In New Zealand, today's December quarter Consumers Price Index figures, which measure the rate of inflation, are not expected to ruffle the kiwi. Forecasters are picking an average 0.5 per cent rise in quarterly inflation, and a 1.8 per cent lift in the December year.
There is little good news on the horizon with dampened commodity prices and a shaky economic outlook continuing to weigh on the growth-based currencies.
The euro had slid to US88.24c by 5pm, compared with US89.40c at the same time on Tuesday.
In the US around 80 of the S&P 500 companies report earnings this week, including blue chips like General Motors, Citigroup, Microsoft, IBM and Intel.
Also in store this week are major economic indicators such as consumer prices, industrial production and consumer confidence, along with the Fed's view of the economy in the Beige Book.
The kiwi rose on the crosses at 5pm, buying A81.77c (A81.46c at Tuesday's close), 55.52 yen (55.49), 29.34 pence (29.15), 0.7045 Swiss francs (0.6998) and 0.4786 euro (0.4725). The Australian dollar was buying $NZ1.2223 ($NZ1.2272).
The Trade Weighted Index was at 51.13 (50.93), 90-day bank bills were steady at 4.86 percent and the monetary conditions index was at minus 767 (minus 785).
On the debt market the March 2002 bonds were at 4.74 per cent (4.73), the April 2004s were at 5.55 per cent (5.56), the November 2006s were at 6.11 per cent (6.12), and the November 2011s were at 6.44 per cent (6.49).
- NZPA
<i>Currency:</i> Kiwi loses ground but leader Aussie falls further
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