The New Zealand dollar closed sharply higher yesterday as it took a ride above US47c in the slipstream of a surging Australian dollar.
A Westpac dealer said the New Zealand dollar's performance was almost entirely led by the Australian dollar and the kiwi had given ground on the aussie cross.
"The kiwi has actually disappointed by failing to carry through," he said, adding that if the Australian dollar failed to push higher, then it was likely the kiwi would "quickly give back its gains".
"It's looking distinctly tired and heavy here," he said of the kiwi.
It finished at US47.21c compared with its US46.72c close on Monday while the aussie closed at US55.36c, up almost exactly one US cent on Monday's local close.
Dealers said one bank was an aggressive aussie buyer and options play had reinforced the surge. A level of US55.50c remained a big barrier and a failure to penetrate was likely to result in a retreat.
The Australian cross rate fell to A85.27 from A85.91c on Monday.
Much weaker than expected preliminary trade figures for July had no impact on the currency. There was a $226 million deficit for the month, about four times expectations.
On the other crosses the kiwi was little changed. At the close, it was buying 56.09 yen (55.91 Monday), 30.90 pence (30.69), 0.7118 Swiss francs (0.7082), and 0.4838 euro (0.4812).
The aussie was trading at $NZ1.1725 ($NZ1.1641).
On the money market, 90-day bills were at 5.90 per cent (5.91), the trade-weighted index was at 53.93 (53.70) and the monetary conditions index was at minus 396 (minus 418).
On the debt market, the April 2004 bonds were at 5.76 per cent (5.75), the November 2006 bonds were also steady at 6.11 per cent while the November 2011 bonds were at 6.36 per cent (6.38).
- NZPA
<i>Currency:</i> Kiwi moves above US47c
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