A lacklustre day befell the New Zealand dollar yesterday, trading in a narrow 10-point range compared with a brief flirtation above US50c overnight Monday.
"You get the feeling that the appetite for fresh risk is diminishing going into the calendar year end," said BNZ currency strategist Stu Ritson.
United States banks generally have their balance date at the end of the calendar year.
The kiwi was knocked back by the strength of a resurgent greenback overnight and by 5pm it lay at US49.86c, little changed from US49.75c at Monday's close.
The Australian dollar was slightly weaker at US55.89c (US55.99c).
Mr Ritson said he expected the erratic trading to continue in the short term, but the bias remained positive further out.
He predicted the kiwi would range overnight between US49.60/90c.
Strong buying on the kiwi versus the yen was a feature of the day after reports the Japanese finance minister believed the yen was overvalued, comments he later denied.
Over 24 hours, the kiwi-yen cross has soared 1.5 per cent to its highest level in more than three years (62.4 yen), before being pushed back to 62.17 (61.37 yesterday). The euro also enjoyed a three year high against the yen at 124.33 yen (123.37).
On other crosses at 5pm the kiwi was buying A89.20c (A88.86c), 0.5004 euro (0.5013), 32.05 pence (31.97), and 0.7370 Swiss francs (0.7403).
The Australian dollar was at $NZ1.1214 ($NZ1.1253).
The trade weighted index was at 57.10 (56.88), the monetary conditions index was at minus 107 (minus 126), and the 90-day bank bill yield was 5.94 per cent (5.91).
On the bond market, the April 2004s were at 5.74 per cent (5.75), the November 2006s were at 6.00 per cent (6.03), the November 2011s were at 6.38 per cent (6.41), and the April 2013s were at 6.43 per cent (6.46).
- NZPA
<i>Currency:</i> Kiwi mired in lacklustre trading
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