The New Zealand dollar took a breather yesterday after sprinting past US49c on Tuesday.
After piling on 100 points in 24 hours, the kiwi was trading in a tight 15-point range yesterday, closing at US49.10c, close to Tuesday's US49.08c close.
The kiwi's effect on exports was beginning to cause concern, and dealers said the pace seemed unsustainable.
"I'm beginning to think that it's run out of a bit of steam," said Tim Robinson of Deutsche Bank.
"You look at the ANZ commodity prices - they weren't very good numbers...and I also think the speed and magnitude of the move in the kiwi has caught a lot of people out. I think people aren't positioned or prepared for it."
Although the market was still trending upwards, dealers were expecting a short-term retracement.
"Our target remains the US50c level but we expect increasing supply up towards this level which will likely slow the pace of appreciation," BNZ currency strategist Stu Ritson said.
Given that the kiwi had gained US4.50c in a month, Deutsche Bank was telling its customers to square up, "to just give the market time to breathe and see how it pans out," Mr Robinson said.
Yesterday the spotlight was on Australian GDP figures and a 25 basis point rise in the Australian cash rate to 4.75 per cent, although neither had much effect.
The Australian dollar was closed at US57.36c, easing down from 21-month highs of US57.68c on Tuesday (closing at US57.60c). Against the kiwi it was buying $NZ1.1681 (compared with $NZ1.1737 at Tuesday's close) while the kiwi appreciated to A85.58c (A85.20c), 60.94 yen (60.61), 33.68 pence (33.53), 0.7670 Swiss francs (0.7644) and 0.5216 euros (0.5207).
In the money market 90-day bills were steady at 5.95 per cent, the trade-weighted index rose to 56.85 (56.69) and the monetary conditions index tightened to minus 128 (minus 142).
The April 2004 bonds rose to 6.16 per cent (6.14 per cent), the November 2006 bonds were steady at 6.62 per cent, and the November 2011 bonds were at 6.76 per cent (6.75).
- NZPA
<i>Currency:</i> Kiwi pauses for breath after massive push
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