The New Zealand dollar failed to make a break for it yesterday, giving up on gains made overnight, and was mired around US49c.
At 5pm the kiwi traded at US49.03c compared with yesterday's close of US49.15, while the Australian dollar was buying US56.82c, retreating from its close on Wednesday at US56.94c.
Bancorp Treasury Services director Derek Rankin said the kiwi had done little today.
"It managed to get to US49.30c overnight and that was principally on the Australian dollar move, which managed to get over US57c, but it's run out of puff today.
"When you look at how far kiwi's rallied in the last five weeks, some degree of consolidation's only to be expected. I think the Australian and New Zealand dollars are finding it a bit tough at these levels," Mr Rankin said.
The kiwi is trading between a broader range of US48.80c and US49.40c, and could test the US49.50c level overnight.
The strength in currencies around the world against the US dollar continued to be more the result of weakness in the greenback, he said. The US dollar has fallen out of fashion at the moment, and the next two to three weeks would be crucial for its long-term prospects.
"The market's priced in quite a high degree of pessimism in terms of the outlook of the US economy, and more particularly the outlook for the US equity markets," Mr Rankin said.
"We're approaching a key time for the US dollar -- it's either going to keep going, and we'll see some multi-year changes to some of these (other) currency rates, or it's going to lose its nerve and the market will pull back from these levels. We'll know over the next two or three weeks."
The greenback fell as far as US95.06c per euro overnight, its lowest since mid-January 2001, before recovering to US94.28c against the euro at 5pm today.
On the crosses the kiwi traded at A86.30c (A86.29c), 61.67 yen (61.67), 33.38 pence (33.37), 0.7683 Swiss francs (0.7646) and 0.5200 euros (0.5186).
Against the kiwi the aussie was buying $NZ1.1588 ($NZ1.1590).
On the money market 90-day bills were at 5.92 per cent (5.93), the trade-weighted index was 56.98 (56.99) and the monetary conditions index was steady at minus 117.
The April 2004 bonds were unchanged at 6.60 per cent, the November 2006 bonds were at 6.51 per cent (6.45), and the November 2011 bonds were steady at 6.67 per cent.
- NZPA
<i>Currency:</i> Kiwi runs out of steam, fails to capitalise on overnight gains
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