After its strongest week in two years the New Zealand dollar opened slightly down this morning.
Around 8.15am today the kiwi was buying US65.45c from US65.54c at 5pm on Friday. It was also worth A85.36c from A85.69c, 0.5097 euro from 0.5117, and 76.63 yen from 76.83. The TWI was at 65.28 from 65.48.
On Friday the NZ dollar touched a six-month peak of US65.70c.
Today ANZ bank said yield demand sealed last week for the NZ dollar as it completed its largest weekly gain - 3 per cent - since May 2004.
Increasing offshore talk of a hike in NZ interest rates later this year was adding fuel to the fire, but ANZ said it was not buying into that scenario.
While the kiwi remained above US65.07c, it maintained the ability to extend its move to US66.95c, ANZ said.
With the cross against the Australian dollar, topside resistance was increasing, and the aussie would garner relative strength this week from the release of second quarter GDP data on Wednesday.
While the Reserve Bank of Australia was not expected to lift interest rates across the Tasman this week, the remote possibility would weaken the cross.
Euro strength this week should temper any moves higher for that cross this week, ANZ said.
Overnight Friday the market had reacted strongly to better-than-expected headlines on non-farm payrolls data, with the US dollar jumping sharply immediately after the release.
But as the market digested the numbers and realised little in them would change the outlook for US Federal Reserve policy, those gains were fully reversed.
The US Labor Department said nonfarm payrolls rose by 128,000 last month, compared with economists' expectations of 120,000. But a weaker-than-forecast 0.1 per cent increase in average hourly earnings added to hopes the Fed would hold rates steady in September as it did last month.
Data from the National Association of Realtors also showed a record decrease in pending US home sales, the latest indication of weakness in the housing sector.
Monday is the Labor Day public holiday in the US.
Reuters currency rates:
8.15am today 5pm Friday
NZ dlr/US dlr US65.45c US65.54c
NZ dlr/Aust dlr A85.36c A85.69c
NZ dlr/euro 0.5097 0.5117
NZ dlr/yen 76.63 76.83
NZ dlr/stg 34.35p 34.42p
NZ TWI 65.28 65.48
Australian dollar US76.67c US76.48c
Euro/US dollar 1.2841 1.2807
US dollar/yen 117.08 117.23
- NZPA
<i>Currency:</i> Kiwi opens slightly down
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