The New Zealand dollar was pegged back yesterday by profit-taking and moves from the Australian dollar, although it looks safe above its key support levels.
By 5pm the kiwi had softened to US48.95c from US49.10c at yesterday's close. It dipped as low as US48.70c during the offshore session as traders booked a profit on recent gains.
The Australian dollar closed locally at US57.39c, not far from Wednesday's close of US57.36c.
An ANZ Investment Bank dealer said the kiwi traded between US48.90c and US49.30c during the day.
"We saw some local demand took it up to its highs, but there were some strong offers around US49.30c," the dealer said.
"For the rest of the day it just traced lower in tandem with the aussie dollar. There is some good support around US57.20c in the aussie and US48.70c for the kiwi.
"My expectation would be for it to hold at these support levels," he said.
The aussie was tackled by profit-taking after a very strong rise overnight, to a level which the Australian market could not sustain.
"It looks like we're going to test the topside still, but there's no guarantee we're going to charge on through to US50c, it needs to hold US48.20/50c, that sort of region, before we can be too confident of that."
Adding to pressure on the kiwi during the previous session was an advance by the US dollar following the release of data during New York trading, which showed the US service sector expanded briskly in May.
However, the greenback later gave up those gains to close flat.
Support for the greenback also came from expectations that if it falls below 124 yen the Bank of Japan will intervene to curb the yen's strength.
The BOJ has intervened on four days in the past couple of weeks -- each time when the dollar was below 124 yen.
The US dollar was buying 124.69 yen at 5pm, from 124.08 yen on Wednesday night. The euro bought US93.71c, down from US94.12c on Wednesday.
On the domestic data front, the kiwi was unconcerned that the April trade surplus was revised down to $4 million from an estimated $19 million.
For the year to April the country recorded a trade surplus of $483 million. That was revised down from an early figure of $536 million and compares with a $561 million deficit in the April 2001 year.
On the cross rates at 5pm, the kiwi was at A85.29c (A85.58c at yesterday's close), 61.00 yen (60.94), 33.59 pence (33.68), 0.7672 Swiss francs (0.7670) and 0.5220 euros (0.5216).
Against the kiwi the aussie was buying $NZ1.1728 ($NZ1.1681).
In the money market 90-day bills were at 5.93 per cent (5.95), the trade-weighted index was at to 56.75 (56.85) and the monetary conditions index eased to minus 137 (minus 128).
The April 2004 bonds were at 6.14 per cent (6.16), the November 2006 bonds were at 6.61 per cent (6.62), and the November 2011 bonds were at 6.77 per cent (6.76).
- NZPA
<i>Currency:</i> Kiwi pegged back by profit taking
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