The New Zealand dollar waded through thin markets yesterday with several holidays offshore splashing a little cold water on the currency markets.
By 5pm the kiwi had risen to US44.83c, from US44.55c at Friday's close, while the aussie was at US53.94c, up from US53.61c late on Friday.
The kiwi bounced around 30 points over the weekend and was likely to move higher this week as interest rate differentials come into play.
"There was some profit-takings on long (positions), kiwi finished on its lows," one local dealer said.
"It should hold US44.70/75c overnight for a push higher. I think it should go over US45c in the next couple of days, but it's just following everything else, it's not doing anything by itself."
The kiwi traded in a US44.78/95c range today.
The aussie saw a range of US53.90/54.09c yesterday, and was likely to fly up towards US54.60c if it breaks through the key US54.10c resistance, he said.
Soft data released in the United States on Friday - including figures showing US unemployment rose to a seven year high of 6 percent - weighed on the greenback, all but ruling out any interest rate tightening by the US Federal Reserve when it meets on Tuesday (Wednesday NZT).
Most commentators now expect the Fed to hold off until August before making its next move.
Further south, following the Reserve Bank of New Zealand's two rate rises in the last month, the Reserve Bank of Australia is expected to announce a 25 basis point hike in its official rate to 4.5 per cent on Wednesday.
Asian investors were sidelined by a Children's Day holiday in Tokyo, while the United Kingdom knocks off for a bank holiday on Monday.
On the crosses at 5pm the kiwi was at A83.12c (A83.08c at Friday's close), 0.4896 euro (0.4931), 57.01 yen (57.00), 30.53 pence (30.47) and 0.7128 Swiss francs (0.7169).
The aussie was buying $NZ1.2031 ($NZ1.2039).
The monetary conditions index was at minus 494 (minus 497), the trade weighted index was at 53.01 (52.96), and 90-day bank bills were at 5.77 per cent (5.80).
On the debt market, the April 2004 bond yields were at 6.09 per cent (6.15), the November 2006s were at 6.59 per cent (6.65), and the November 2011s were at 6.76 per cent (6.80).
- NZPA
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