The New Zealand dollar was struggling today against a firmer greenback ahead of an expected US interest rate hike there this week.
At 5pm, the kiwi dollar was US60.63c compared with US61.10c at Friday's close. It failed to realise fears it would near the year's low of US59.93c in March, although dealers said it might slip below the key US60c level at some point this week.
Analysts say there is a generally negative tone about the kiwi following last week's worse-than-expected current account data.
At the same time, the US dollar was being buoyed by expectations that the Federal Reserve would raise interest rates on Thursday .
Investors were moving their money out of what were perceived as riskier markets towards a safer currency, Michael Gordon, a market strategist at Westpac said.
"By our count, 12 central banks have raised rates in June and as cheap money is being withdrawn, our markets are starting to pay attention to current accounts again.
"These external imbalances are starting to matter again."
The ANZ said the kiwi dollar would remain under pressure until the market realised that the Fed would peg its rate rise no higher than 25 basis points.
Local market data to watch for this week includes business and consumer confidence surveys, May merchandise trade figures on Wednesday, and building consents on Friday.
A new report on the government's long-term fiscal position is due out tomorrow.
Tonight the NZ dollar had slipped to A82.86c from A83.08c on Friday evening, and to 0.4845 euro from 0.4850. It fell to 70.56 yen (70.78 yen), while the TWI was down to 61.54 from 61.77.
The following are Reuters currency rates:
5pm today 5pm Friday
NZ dlr/US dlr US60.63c US61.10c
NZ dlr/Aust dlr A82.86c A83.08c
NZ dlr/euro 0.4845 0.4850
NZ dlr/yen 70.56 70.78
NZ dlr/stg 0.3332 0.3337
NZ TWI 61.54 61.77
Australian dollar US73.17c US73.45c
Euro/US dollar US1.2516 US1.2576
US dollar/yen 116.38 115.98
- NZPA
<i>Currency:</i> Kiwi struggles against US dollar
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