The New Zealand dollar rebounded slightly from profit-taking earlier yesterday but turned up its nose at positive government forecasts.
By 5pm the kiwi was at US51.51c, compared with its US51.75c close on Wednesday and a high the previous night of US51.96c -- its highest level since January 2000.
The aussie was at US56.58c, compared with US56.66c on Wednesday.
One local dealer said the market was quiet yesterday.
"It's pretty quiet, it's Christmas, obviously a retracement from last night and we just edged up on the day," he said.
The kiwi showed little interest in current account data and a rosy government fiscal update, which were broadly within market expectations.
Treasury is now predicting a $3.5 billion surplus in the current year, with a pattern of rising surpluses reaching $5.2 billion in three years.
The Government's December economic and fiscal update (DEFU) paints a picture of robust economic growth, low inflation and low unemployment over the next three years.
As a result, the government bond tender programmes were also cut back significantly, by $900 million to $2.5 billion, and next year from $5.6 billion to $3.4 billion.
"It was a positive but it was expected to be positive - non-market moving but you certainly weren't walking away thinking, 'gee that was a disappointment'," the dealer said.
However, New Zealand's current account deficit deteriorated to $2.3 billion in the September quarter, exactly on economists' estimates and at 3.1 per cent of gross domestic product.
The kiwi's range today was US51.35/49c, and the dealer picked it to trade between US51.35/70c overnight.
In offshore trade the greenback weakened slightly versus the yen, its sentiment depressed by the bankruptcy of major US financial services firm Conseco and nervousness about US-Iraq tensions.
The US dollar was at 121.12 yen at 5pm in Wellington, compared with 121.44 yen on Wednesday, while the euro was at US$1.0266 (US$1.0268).
On the crosses at 5pm, the kiwi was buying A91.05c (A91.34c at Wednesday's close), 0.5017 euro (0.5012), 62.39 yen (62.20), 32.15 pence (32.14), and 0.7337 Swiss francs (0.7385).
The trade weighted index, a basket of currencies for key New Zealand trading partners, eased back to 58.04 from 58.32 yesterday, 90-day bank bills were at 5.92 per cent (5.94), and the monetary conditions index eased to minus 24 after moving slightly into the positive yesterday to +2.
The Australian dollar was at $1.0983 ($1.0947).
Bonds continued Wednesday's rally on yesterday's news of the expected tender cancellations. The April 2004s were at 5.69 per cent (5.72), the November 2006s at 5.87 per cent (5.92), the November 2011s at 6.19 per cent (6.26), and the April 2013s at 6.22 per cent (6.29).
- NZPA
<i>Currency:</i> Kiwi rebounds from early profit-taking
AdvertisementAdvertise with NZME.