The New Zealand dollar remained in consolidation mode yesterday, struggling to reach back up to the US55c mark.
At 5pm the kiwi was at US54.75c, an improvement on last night's close of US54.60c, while the aussie was little changed at US58.83c (US58.85c at Wednesday's close). The kiwi improved on the trans-Tasman cross to A93.09c (A92.79c).
The kiwi traded in a range today of US54.66/92c.
Bank of New Zealand currency strategist Stuart Ritson said the kiwi remained in consolidation mode.
"We anticipate that continued demand for New Zealand dollar yield and a weaker US dollar will eventually push the New Zealand dollar up towards US57.00c in coming weeks, but further profit-taking will contain the topside and yields a mildly bearish bias in the shorter time frame," Mr Ritson said in a daily commentary.
Offshore appetite for kiwi yield and currency risk manifested itself in the issuance of $150 million five-year eurokiwi bonds overnight, bringing the total on issue this month to $450 million.
That compared with a total of $1.1 billion in 2001 and $2.2 billion in the whole of 2002.
In Asian trade the greenback enjoyed a reprieve following a rise in US share prices, but momentum waned as fears about a US war with Iraq remained the dominant factor.
The US Federal Reserve has since decided to leave its base cash rate at 1.25 per cent, a 41-year low.
Against the yen, the greenback improved to 118.64 yen from last night's close of 118.28 yen.
The euro pushed up towards US$1.0900 but ran out of steam, pulling back to US$1.0820 in Wellington yesterday afternoon (US$1.0853), as European Central Bank council member Ernst Welteke voiced concern that the strengthening euro might cause problems for the dull European economies.
New Zealand's trade-weighted index rose to 60.22 (59.98), 90-day bank bills were at 5.85 per cent (5.84), and the monetary conditions index was at plus 151 (130).
Against other major currencies the kiwi rose to 0.5060 euro (0.5031), 64.97 yen (64.59 yen), 33.23 pence (33.20), and 0.7438 Swiss francs (0.7385).
The Australian dollar was buying $1.0745 ($1.0778).
On the debt market, the April 2004 government bonds were at 5.50 per cent (5.46), the November 2006s were steady at 5.63 per cent, the November 2011s were at 6.03 per cent (5.95), and the April 2013s were at 6.07 per cent (5.99).
- NZPA
<i>Currency:</i> Kiwi remains in consolidation mode
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