The New Zealand dollar again traded in a tight 10-point range as markets thinned out in the lead-up to Christmas.
By 5pm, the kiwi was at US49.90c, just four points higher than Tuesday's US49.86c close. Its Australian counterpart was at US56.03c (US55.99c).
"Erratic trade earlier in the week has been replaced by the New Zealand dollar consolidating in a narrow range," Bank of New Zealand currency strategist Stu Ritson said.
Mr Ritson said that there was simply a lack of direction in the market at the moment. The Reserve Bank of Australia provided no stimulus, keeping its 4.75 per cent official cash rate unchanged, as expected.
In the short-term, the kiwi could dip further towards the US49.20c level, Mr Ritson said. But a 50 million issue of euro-kiwi bonds overnight Tuesday showed there was still on-going demand for the high-yielding currency.
He forecast an overnight range of US49.60/90c.
Farmers will be glad if the kiwi takes a breather at this point.
The latest ANZ World Commodity Price Index, out yesterday, shows the New Zealand dollar commodity price index fell 1.3 per cent during November and is down 13.9 per cent on the level prevailing a year ago.
While a fourth consecutive monthly rise in dairy prices was enough to drive a 1.5 per cent increase in the world price index, the rising kiwi wiped out that gain, ANZ chief economist David Drage said.
"On its way down, the lower New Zealand dollar gave significant impetus to export returns. We are now seeing some of that roll off," Mr Drage said.
Against its other key trading partners at 5pm, the kiwi was buying A89.07c (A89.20c), 0.4994 euro (0.5004), 31.76 pence (32.05), and 0.7351 Swiss francs (0.7370).
The Australian dollar was at $NZ1.1228 ($NZ1.1214).
The trade weighted index was at 57.07 (57.10), the monetary conditions index was at minus 109 (minus 107), and the 90-day bank bill yield was steady at 5.94 per cent.
On the bond market, the April 2004s were flat at 5.73 per cent, the November 2006s were at 5.96 per cent (6.00), the November 2011s were steady at 6.32 per cent, as were the April 2013s at 6.37 per cent (6.43).
- NZPA
<i>Currency:</i> Kiwi remains flightless as Christmas season nears
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