The New Zealand dollar paused in steady trading today after rising over US64c overnight.
The US dollar weakened against most currencies after a tame reading of underlying US inflation added to data suggesting the US economy was slowing.
At 5pm today, the kiwi was worth US64.15c, slightly below its opening, but well up on its US63.58c close yesterday. Its overnight peak of US64.40c was a three-and-a-month high.
The NZ dollar also strengthened overnight against the currencies of other major trading partners. It was buying A83.65c from A83.18, 0.4990 euro from 0.4972, and 74.18 yen from 73.79. The TWI closed on 63.84 from 63.45.
ANZ bank said the interest rate differential between this country and the US had moved 25 basis points in the kiwi's favour during the past three days. That happened as NZ data was strong and US data weak.
In a market where the focus was heavily on yield, that had provided the kiwi with sufficient momentum to push back through resistance at US64.20c.
That move was aided by further issuance overnight of uridashi bonds - bonds issued in Japan but denominated in the New Zealand dollar, ANZ said.
Muted second-quarter wage pressures across the Tasman had helped convince many offshore players to buy NZ dollars and sell the Australian currency, ANZ said.
The cross was approaching levels where local importers would again act to help in capping the topside around A84c, ANZ said.
The US dollar slipped after the US consumer price data ratcheted up speculation that inflation risks were subsiding, which could prompt the Federal Reserve to keep rates on hold next month.
"Coming after the weak PPI figures, the CPI data keeps intact speculation that the Fed could pause again on rates, which is driving a bit more selling in Tokyo," said Mitsuru Sahara, senior vice president of forex trading at Mitsubishi UFJ Bank.
Reuters currency rates:
5pm today 5pm Wednesday
NZ dlr/US dlr US64.15 US63.58c
NZ dlr/Aust dlr A83.65c A83.18c
NZ dlr/euro 0.4990 0.4972
NZ dlr/yen 74.18 73.79
NZ dlr/stg 33.82p 33.57p
NZ TWI 63.84 63.45
Australian dollar US76.68c US76.47c
Euro/US dollar US1.2853 US1.2788
US dollar/yen 115.67 116.06
- NZPA
<i>Currency:</i> Kiwi pauses above US64c
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