The New Zealand dollar lost its zing yesterday after storming the US50c mark on Friday.
By 5pm the kiwi was at US49.45c, down from Friday's close of US49.95c and a Friday high of US50.07c. Its aussie counterpart eased to US56.45c from US56.64c on Friday.
"All in all it's just come off relatively quietly during the day. There've been no major dramatics," one local dealer said.
"It's just a correction to the recent upmoves."
Official figures showing Kiwis are still spending up large, with retail spending rising a surprisingly robust 1.1 per cent in the September quarter, had no effect on the local unit.
With a public holiday in the United States overnight the kiwi was expected to trade a quiet US49.20c to US49.50c range.
Bank of New Zealand currency strategist Stuart Ritson said in a daily commentary that the kiwi failed to benefit from weakness in the United States dollar during the weekend.
The US dollar was pressured as a result of continuing fears of an attack on Iraq, lower equities and a negative reading of the US Federal Reserve's larger than expected interest rate last week.
"The overall tone (in the kiwi) remains positive but the sharp move higher since the October 31 lows (US48.13c) suggest a period of consolidation and the US50.00/10c region remains a strong technical and psychological resistance," Mr Ritson said.
"We would look to buy dips but expect to be able to buy the New Zealand dollar at lower levels. Support is seen at US49.35c, then the US48.90/49.00c region."
The US dollar eased to 119.58 yen from Friday's Wellington close of 121.06 yen, while the euro was at almost a three year high of US1.0130c (1.0087).
The kiwi softened on all the major crosses by 5pm, buying A87.63c (A88.15c at Friday's close), 0.4882 euro (0.4950), 59.17 yen (60.44), 0.3110 pence (0.3162), and 0.7141 Swiss francs (0.7249).
The Australian dollar was buying $NZ1.1405 ($NZ1.1345).
The 90-day bank bill yield was unchanged at 5.90 per cent, the New Zealand dollar trade-weighted index was at 55.82 (56.51), and the monetary conditions index was at minus 224 (minus 162).
The April 2004 bonds were at 5.61 per cent (5.65), the November 2006s were at 5.87 per cent (5.93), and the November 2011s were at 6.14 per cent (6.19).
- NZPA
<i>Currency:</i> Kiwi loses zing as US holiday looms
AdvertisementAdvertise with NZME.