A narrow range continued to hold the New Zealand dollar in its thrall today, with the kiwi making its biggest moves during offshore sessions.
By 5pm the kiwi was at US57.54c, little changed from its close yesterday of US57.52c. The aussie was at US65.21c, from US65.25c yesterday.
One local dealer said the kiwi traded between US57.40/60c, and was finishing near its highs.
"There was good two-way business today, it has come up on the back of the aussie which initially looked weak but it's climbed off the floor," he said.
"We are seeing a bit of interest in buying the stuff (kiwi), particularly domestically ...I think we will see it trade around the US57.30/80c range (overnight). It will all hinge once again on the aussie and what happens to the big buck."
The market has priced in a 25-point cut in the Reserve Bank's Official Cash Rate tomorrow morning, to 5.00 per cent, although there has been much speculation about a 50-point cut.
"It will all be in the statement, how they spin the thing -- whether or not there's going to be another easing or there's no more easing," the dealer said.
Key data today showed New Zealand job ads increased by 5.6 per cent in June, while across the Tasman the Australian annual inflation rate fell to 2.7 per cent, boosting the hopes of those pushing for an interest rate cut next month.
In Tokyo today the United States dollar struggled to hold gains against the yen, as negative Japanese comments on foreign exchange intervention eroded advances on news that US troops had killed two sons of former Iraq president Saddam Hussein.
In Wellington by 5pm the euro rose to US$1.1365 from US$1.1329 yesterday, and the US dollar eased to 119.02 yen (119.21).
On the crosses at 5pm, the kiwi was buying A88.25c (A88.15c at 5pm yesterday), 68.51 yen (68.55), 36.04 pence (35.99), 0.7824 Swiss francs (0.7812), and 0.5064 euro (0.5078).
The Australian dollar was buying $1.1334 ($1.1339).
The monetary conditions index was at plus 193 (198), the trade-weighted index was at 61.67 (61.69) and 90-day bank bill yields were at 5.06 per cent (5.10).
The February 2005 yields were at 4.99 per cent (5.05), the November 2006s were at 5.18 per cent (5.24), and the November 2011s were at 5.56 per cent (5.66).
- NZPA
<i>Currency:</i> Kiwi still constrained by tight range
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