The New Zealand dollar rowed back from a six-month high today after comments from a Reserve Bank official that the kiwi's medium-term trend was down.
Having hit US66.55c in overnight trade, the kiwi retreated to US66.27c by 5pm compared to Monday's close of US66.15c.
It also lost ground against the aussie dollar, finishing unchanged from yesterday on A87.82c, having rushed up to A88.40c overnight.
RB assistant governor Grant Spencer made comments about the kiwi in an interview with Reuters in Singapore where he is attending IMF and World Bank meetings.
But he also reiterated the tough anti-inflation tone of his boss, bank governor Alan Bollard, who on Thursday said he may have to hike rates again to keep inflation at bay. That stance is what has sent the kiwi over 3 per cent higher since Thursday morning.
"Certainly there is no scope for any easing for a considerable time," Mr Spencer said, declining to give a time frame on when rates were likely to be cut.
The TWI closed on 66.60, virtually unchanged from yesterday.
Mr Spencer said the main risks to the NZ inflation outlook stemmed from continued strength in the housing and labour markets.
ANZ bank said the NZ dollar weakened after Mr Spencer's comments.
Also slightly depressing the kiwi, the market is bracing for ugly current account deficit figures on Thursday. Economists predict the June year deficit will be $14.5 billion, or 9.2 per cent of GDP.
Although the Reserve Bank is picking the deficit to improve from that peak, others believe it will stick at what is considered an unsustainable level for a long time partly due to the resurgence of the kiwi dollar.
The following are Reuters currency rates:
5pm today 5pm Monday
NZ dlr/US dlr US66.27c US66.15c
NZ dlr/Aust dlr A87.82c A87.81c
NZ dlr/euro 0.5215 0.5224
NZ dlr/yen 78.12 77.95
NZ dlr/stg 35.22p 35.17p
NZ TWI 66.60 66.59
Australian dollar US75.53c US75.28c
Euro/US dollar 1.2710 1.2663
US dollar/yen 117.89 117.85
- NZPA
<i>Currency:</i> Kiwi pulls back from six-month high after RB jawboning
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