The New Zealand dollar lurked near the middle of its recent range today with very little interest evident.
"There's nothing much going on, US55.12/30c is the range, and basically we're watching the war," one local dealer said.
"So it's going to be another night of that tonight. I would think the range overnight would be US55.10/50c," he said.
There had been minimal volume during the session.
By 5pm the kiwi was at US55.25c, compared with its US55.35c close here yesterday and little changed from its 9am level of US55.20c.
The aussie dollar fell back to US60.18c against its US60.39c close yesterday. That was one point below its morning level in Wellington.
Westpac currency strategist Johnathan Bayley said major currency pairs saw some sizeable moves overnight, in the face of a broad US dollar rally emerging alongside a sell-off in bond markets and another upward swing in US stock prices.
"(However,) the US dollar should have little difficulty resuming its fundamental depreciation beyond its war-driven swings. This can be equally applied to New Zealand dollar/US dollar," he said.
"The yield trade is already well populated, but in the current growth environment inhabitants have little incentive to leave.
"While in the near term kiwi/US dollar is struggling above US55.50c, wider market drivers imply it will leave its late March range on the upside."
In Asian trade the US dollar backed off as initial euphoria over the latest advance by US-led forces to the outskirts of Baghdad waned in a market constantly looking over its shoulder for the next development in the Iraq war.
The greenback had soared when the fast pace of the march towards the Iraqi capital suggested to some players that the war could end soon.
In Wellington at 5pm the US dollar was buying 118.73 yen, up from 118.40 yen yesterday, while the euro weakened to $US1.0772 ($US1.0883).
On the crosses at 5pm, the kiwi was buying A91.80c (A91.65c yesterday), 0.5129 euro (0.5088), 35.24 pence (35.11), 0.7614 Swiss francs (0.7523) and 65.58 yen (65.55). The Australian dollar was buying $NZ1.0898 ($NZ1.0910).
On the money market, 90-day bills were unchanged at 5.81 per cent, the monetary conditions index was at plus 195 (186) and the trade-weighted index was at 60.80 (60.69).
Among the bonds, the April 2004 yields were steady at 5.47 per cent after earlier rising to 5.52 per cent, the November 2006s were at 5.58 per cent (5.56) and the November 2011s were at 6.02 per cent (5.97).
- NZPA
<i>Currency:</i> Kiwi meanders to close near middle of range
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