The New Zealand dollar came under pressure slightly yesterday as a stronger United States dollar flexed its muscles against southern currencies.
By 5pm the kiwi was at US46.86c from US47.03c at Wednesday's close, slipping at one stage to US46.65c but ending around its opening levels. Its aussie counterpart was at US55.09c (US55.27c).
"There does seem to be a bit of a lack of interest in buying commodity currencies at the moment, despite the fact that they are prepared to sell the big dollar," said one dealer.
While it strengthened against the aussie, the US dollar performed poorly against the euro and yen, with the euro gained 20 points to close here at US98.25c, and yen gaining nearly 70 points during the session to 117.94.
The dealer suggested the kiwi was in a pattern of consolidation but positive on dips in the mid to low US46c region.
"Obviously we've performed very badly against the aussie dollar. We're at the lowest levels that we've been for quite a while against that and there definitely has seemed to be a lack of interest to buy kiwi once we got above US47.30c, despite the fact that there were reasonably positive moves in quite a few other currencies."
He said the kiwi could struggle tonight to break through the US47c figure and could look down towards US46.60/70c.
Bank of New Zealand currency strategist Stu Ritson said weakened US equity markets this week had slowed down New Zealand's currency growth story.
US stocks closed at their lowest levels in about two weeks on Wednesday as a bleak outlook from Nortel Networks Corp and a slew of downbeat analyst comments eroded hopes for a swift upturn in corporate profits.
The tech-laced Nasdaq Composite dropped 33.4 points, or 2.48 per cent, to 1314.38, while the blue-chip Dow Jones industrial average fell 130.32 points, or 1.48 per cent, to 8694.09 and the S&P 500 lost 16.95 points, or 1.81 per cent, to 917.87.
Looking ahead, Mr Ritson said the kiwi was likely to consolidate between US46.50c and US47.50c over the next few trading days.
On the crosses at 5pm the kiwi was buying A85.03 cents (85.18 at yesterday's close), 55.24 yen (55.66), 30.47 pence (30.72), 0.7006 Swiss francs (0.7021), and 0.4768 euro (0.4787).
The aussie was trading at $1.1767 ($1.1745).
On the money market, 90-day bills were 5.89 per cent (5.90), the trade-weighted index was 53.38 (53.63) and the monetary conditions index was eased to minus 448 (minus 424).
On the debt market, the April 2004 bonds were at 5.75 per cent (5.80), the November 2006 bonds were at 6.11 per cent (6.09), and the November 2011 bonds were at 6.36 per cent (6.42).
- NZPA
<i>Currency:</i> Kiwi performs badly against Aussie, treads water
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