The New Zealand dollar kept its head well above US55c today, but there was little war-related action visible during the local session.
By 5pm, the kiwi was buying US55.32c, up from US55.02c at yesterday's close, having dipped back towards US54c in recent days.
ANZ Investment Bank senior dealer Mark Elliott said the kiwi saw some commercial selling interest this morning but for most of the day was little changed.
The kiwi traded between US55.21/40c, and had solid support at US55c.
"There was no volatility in the euro or the aussie in our time zone and that constrained the kiwi action," Mr Elliott said.
"Kiwi could potentially push up to US55.80c (overnight) so long as we don't trade below US55c.
"There's been a good sell-off in the kiwi in the last couple of weeks in response to the liquidation of short US dollar positions across the board.... For the previous six months or so the world's been selling US dollars on the weakening economy, the faltering stock market, uncertainty over geopolitical events.
"Maybe inside interests got the word that things were coming to a resolution and started liquidating pre-existing positions, some of those were very large amounts...."
In Asian trading, the greenback saw limited support after news that the US and Britain were advancing across the southern Iraqi desert after launching an invasion under the cover of darkness and an intense artillery barrage.
In Wellington, the euro rallied to $US1.0604 by 5pm, from $US1.0592 yesterday, while the Australian dollar was buying US59.35c (US59.01c).
The US dollar strengthened to buy 120.35 yen, compared with 119.99 yen last night.
On the 5pm crosses, the kiwi was buying A93.21c (A92.87c), 0.5217 euro (0.5195), 0.7687 Swiss francs (0.7652), 66.60 yen (66.02), and 35.35 pence (35.18).
The Australian dollar was at $NZ1.0730 ($NZ1.0788).
On the money market, 90-day bills were at 5.85 per cent (5.85), the monetary conditions index was at plus 248 (213), and the trade-weighted index was at 61.40 (60.97).
Among the bonds, the April 2004s were at 5.61 per cent (5.63), the November 2006s were at 5.72 per cent (5.75) and the November 2011s were at 6.15 per cent (6.16).
- NZPA
<i>Currency:</i> Kiwi supported above US55c, sees little action
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