The New Zealand dollar resumed its uptrend yesterday, supported by a significant eurokiwi issue overnight and a renewed focus on yield differentials.
By 5pm the kiwi was at US49.51c, up slightly on Tuesday night's close of US49.30c. The aussie was at US56.12c (US56.03c).
A $100 million eurokiwi issue by the Norwegian Local Government Funding Authority gave the local unit a boost.
"The eurokiwi issue overnight provided some underlying sort of support for the market," Bancorp Treasury Services director Jon Clarke said.
"We are only six weeks away from the commencement of the export season and we've shown by the overnight news that the offshore investors are still reasonably interested - Tuesday's treasury bill tender was well supported so all the same factors are all there.
"At the moment the view has to be that what we've seen is a bit of a correction after a reasonable rally towards US50c and the general trend is still upwards, as it's been for the last month or so."
The kiwi improved against all the major currencies by 5pm, buying at A88.23c (A87.87c at Tuesday's close), 0.4897 euro (0.4880), 59.30 yen (58.97), 0.3118 pence (0.3107), and 0.7160 Swiss francs (0.7140).
The Australian dollar was buying $NZ1.1335 ($NZ1.1383).
Mr Clarke expected the kiwi to range between US49.30c and US49.80c overnight.
"With the yield play coming into focus again ... people will be feeling very happy with their kiwi positions.
"Kiwi will continue to move gently and gradually higher."
By 5pm the 90-day bank bill yield was at 5.87 per cent (5.89), the New Zealand dollar trade-weighted index was at 55.94 (55.70), and the monetary conditions index was at minus 214 (minus 236).
The April 2004 bonds were at 5.56 per cent (5.56), the November 2006s were at 5.83 per cent (5.82), and the November 2011s were at 6.07 per cent (6.05).
- NZPA
<i>Currency:</i> Kiwi resumes uptrend, buoyed by eurokiwi issue
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