KEY POINTS:
The New Zealand dollar rebounded from an early session slump, but at least one dealer is expecting it to tumble over the next week or so.
Investors remained cautious following the central bank's surprise intervention on Monday, but yield-related buying and strength in the Australian dollar pushed the kiwi back up from earlier lows to a close of US75.02c.
That compared with US75.30c at yesterday's close, and a post-float high of US76.40c on Saturday.
"There's been a bit of two-way flow. Initially we came in overnight and the US dollar was a little stronger, the aussie was a little bit weaker, so the kiwi was a little bit weaker ," ANZ technical analyst Mark Elliott said.
He said local traders had sold the kiwi afte r seeing it fail around the US75.50c mark, "and what we're seeing here is a bit of a squeeze back, so I wouldn't be surprised if we get back to US75.25c, maybe US75.50c or a little higher".
But from there, he believed the kiwi would vulnerable to a bigger selloff, and could fall to the low US73c mark over the next week or two.
Current support was around US74.70c, with resistance at US75.50c.
Mr Elliott said it was difficult to say whether the kiwi would weaken from April retail sales data out tomorrow, a Bank of Japan statement on interest rates on Friday or more monetary intervention.
"It's not really important why it happens, the point is the market is technically vulnerable and all we need is a catalyst to give it a nudge."
In the US, the greenback rose to an 11-week high against the euro as investors flock to rising US Treasury yields, currently at five-year highs.
The greenback was buying US$1.3304 euro (US$1.3364 yesterday) and the yen to 122.23 (121.66 yen yesterday).
Reuters currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US75.02c US75.30
NZ dlr/Aust dlr A89.24c A89.20c
NZ dlr/euro 0.5638 0.5637
NZ dlr/yen 91.70 91.65
NZ dlr/stg 38.02p 38.17p
NZ TWI 73.21 73.32
Australian dollar US84.07c US84.41c
Euro/US dollar 1.3304 1.3364
US dollar/yen 121.22 121.66
- NZPA