The kiwi was down over US1 cent tonight after a volatile day's trading, which at one point saw it slip to an eight month low.
At 5pm today the kiwi was fetching US59.58c (from US60.60c at 5pm yesterday), having ranged between US59.15c and US59.95c. "It was a volatile day, a volatile night the night before and we are probably expecting a wee bit more volatility into tonight's session as well," a Wellington-based dealer said. The low end of today's trading range was the lowest the kiwi has traded at since September last year. Some investors are dumping the kiwi in the expectation the US will raise interest rates as soon as June.
The dealer said a lot of speculative holders were selling the kiwi against crosses, leading to a capitulation of the New Zealand dollar against European currencies and hampering any attempts for the New Zealand dollar to rise against the greenback. The Australian dollar is also struggling against the greenback, and at 5pm was buying US68.25c (U69.42c).
The kiwi often tracks the euro, but the dealer said the two currencies became "uncoupled" overnight.
The euro moved up against the greenback overnight, following a bomb attack in Iraq which killed the head of Iraq's Governing Council. Meanwhile, at 5pm in Wellington, the greenback was buying 114.11 yen (113.72), and the euro was buying US$1.1987 (US$1.1962).
On the crosses, the kiwi was buying A87.31c (A87.32c), 33.79 British pence (34.32), 68.00 yen (68.92), 0.7628 Swiss francs (0.7795), and 0.4970 euros (0.5066).
The trade-weighted index was at 61.74 (62.59), while the monetary conditions index was at plus 282 (353).
On the debt market, 90-day bank bill yields were at 5.94 per cent (from 5.95 per cent).
The February 2006 yields were at 5.91 per cent (5.92), July 2009s were unchanged at 6.14 per cent, and April 2013s were at 6.27 per cent (6.29).
- NZPA
<I>Currency:</I> Kiwi slips in volatile trading
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