The New Zealand dollar was undisturbed by inflation data yesterday morning, its fortunes still in the hands of Australian and European counterparts.
The dollar closed a little firmer at 40.70USc (40.64c on Friday), trading in light volumes in a tight range of 40.68-40.82c.
"We traded very, very quietly. We were up initially on the back of the stronger aussie, and then the aussie petered out around the 51.10USc level, and it drifted for the rest of the day. So the kiwi's been very stable," a currency dealer said.
"We are just looking for which way the aussie and euro are going to break and we will follow that."
The dealer said the kiwi was unaffected by June quarter inflation data which rose 0.9 per cent, as expected. For the third quarter in a row annual consumers price index figures have come in outside the central bank's 0-3 per cent inflation target. For the year to June inflation ran at 3.2 per cent.
However, analysts are split on whether the Reserve Bank will raise interest rates at its next scheduled opportunity on August 15.
Half expect a small quarter percentage point rise to 6.00 per cent while the rest think the bank will stay its hand until the first half of 2002.
The bank can discount one-off inflation factors such as tax increases or a sharp rise in world oil prices. Yesterday's figures showed the cost of fuel was the single biggest contributor to the quarter's inflation.
Elsewhere, global financial markets continue to keep a close eye on economic turmoil in South America and other emerging economies.
The aussie ended locally at 50.92USc (50.64c).
On the crosses, the kiwi was at 79.95Ac (80.27c), 29.05 pence (28.94), 0.9314 marks (0.9328) and 0.4762 euros (0.4770). The trade weighted index was at 49.39 and with the 90-day bills at 5.80 per cent (5.81) the monetary conditions index was at minus 844 (minus 850).
- NZPA
<i>Currency:</i> Kiwi shrugs off CPI data
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