The New Zealand dollar held steady above US49c yesterday as the greenback weakened on further negative sentiment.
At 5pm the kiwi dollar was trading at US49.21c, close to its days low but stronger than Tuesday's close of US49.10c.
The Australian dollar was also stronger, trading at US56.91c (compared with US56.44c Tuesday).
Dealers said the soggy US dollar was helping push the kiwi above the US50c level again, possibly by the end of the week.
"It all depends on how quickly the euro moves higher," said one dealer. "We've spent three years with the economists calling it higher and everyone else saying 'bollocks,' but there seems to be a pretty universal scenario that the kiwi will end up higher."
Continued accounting scandals in the US and its soft economy were continuing to pummel the greenback, and a warning speech by President Bush to corporate America overnight had not made much of an impression.
"If you're no longer going to trust big companies with share investments then where do you go? You go to interest rates and New Zealand's interest rates are some of the best."
But Bank of New Zealand currency strategist Stuart Ritson said in a daily commentary that the kiwi had underperformed during the current bout of greenback weakness, compared with other currencies such as the Norwegian krona and the South African rand.
"The New Zealand dollar was one of the first cabs off the rank in the assault against the US dollar during 2002, but now that the weakness has become more generalised, the New Zealand dollar has lost some of its lustre from an outperformance perspective," Mr Ritson said.
However, he remained confident the kiwi would reach US51.50c in coming weeks.
Last night's range for the kiwi was seen as largely dependent on the moves of other currencies. Dealers expected it to soar as high as US49.50c but said its low could range between US49c/49.15c.
On the crosses the kiwi traded at A86.53c (A87.01c at Tuesday's close), 58.13 yen (58.35), 31.82 pence (31.90), 0.7318 Swiss francs (0.7308) and 0.4968 euro (0.4972).
Against the kiwi, the aussie was buying $NZ1.1557 ($NZ1.1495).
On the money market 90-day bills were at 6.05 per cent (6.05), the trade-weighted index was at 55.68 (55.73) and the monetary conditions index eased slightly to minus 222 (minus 216).
On the debt market the April 2004 bonds were at 5.91 per cent (5.97), the November 2006 bonds were at 6.28 per cent (6.41), and the November 2011 bonds were at 6.62 per cent (6.68).
- NZPA
<i>Currency:</i> Kiwi steers steady course towards US50c
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