News that the United States had nabbed former Iraqi dictator Saddam Hussein saw the New Zealand dollar slip this morning but later regain its composure.
At 5pm, the kiwi was fetching US64.60c (from US64.83c at the same time on Friday), having traded between US64.15c and US64.65c today.
The kiwi's slip came a day after 66-year-old Saddam was collared by US troops near his home town of Tikrit at 6.30am NZT yesterday, while the world's currency markets were closed.
BNZ currency strategist Sue Trinh said Saddam's capture pushed the greenback higher, weighing on the euro, kiwi and Australian dollar.
At market's close, the euro was at US$1.2206 (US$1.2218), although it was at US$1.2168 at 8.30am.
The Australian dollar was at US73.99c (US73.97c), from US73.82c at 8.30am.
As trading on Asian financial markets progressed today the kiwi, aussie and euro regained their composure, Ms Trinh said.
"You saw them (the Asian financial markets) reverse the weakness across the currencies and subsequently the kiwi is a little firmer, although nowhere near Friday's level," she told NZPA today.
"The market's still sceptical or a little bit cautious."
Shorter term, the kiwi could succumb to some major profit-taking, "so with that in mind we're looking at about the US64.10c region."
Meanwhile, the greenback was buying 108.02 yen (107.98).
On the crosses, the kiwi was buying A87.32c (A87.65c), 0.5293 euro (0.5307), 69.78 yen (69.69), 37.08 pence (37.13), and 0.8225 Swiss francs (0.8234).
The trade weighted index was at 65.10 (65.31), the monetary conditions index was at plus 486 (500), and 90-day bank bills were at 5.31 per cent (5.30).
ABN Amro Craigs sharebroker Matt Willis said news of Saddam's capture had shaken up the bond market today, leading to a sell-off that pushed some yield rates higher.
On the debt market, April 2004 bonds were unchanged at 5.17 per cent, February 2006s were at 5.65 per cent (5.62), and November 2011s were at 6.04 per cent (5.98).
- NZPA
<i>Currency:</i> Kiwi slips on news of Saddam's capture, later regains composure
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