It was a "very, very quiet day" for the New Zealand dollar yesterday, but it held steady against pressure from the United States dollar, largely thanks to the buying of a US bank.
Dealers estimate the bank has bought $200-300 million over the last few days on behalf of Contact Energy's parent company, Edison Mission, which yesterday announced it was mounting a takeover bid for Contact.
That helped offset data showing a major decline in business confidence yesterday and a recovery by the greenback, which gained more a cent on the euro overnight.
"That's probably the prime reason," one dealer said of the Edison bank's influence on the dollar. "The kiwi's had a little bit of a lack of interest - those other currency moves would have normally driven it lower."
The euro closed at US90.20c on the back of renewed confidence by US investors of an economic recovery, and a European Central Bank's decision to leave interest rates unchanged at 3.75 per cent.
The kiwi, which often rises on the back of the euro, drifted off an early morning rise to close US41.47c (US41.17c at Thursday's close).
The Australian dollar traded within a tight range, closing at US50.10c (US49.96 at yesterday's close).
Looking ahead, dealers predicted the kiwi would remain reasonably bid, travelling between US41.30c and US41.70c overnight.
The kiwi-aussie cross rose to A82.78c, from A82.62c at Thursday's close and the trade-weighted index climbed to 49.44 from 48.87 - its highest level since September 16 and nearly 5 per cent above its low of 47.17 on September 23.
On other crosses, the kiwi was buying 0.4596 euros (0.4512 at yesterday's close) 50.30 yen (49.52), 28.68 pence (28.35), 0.8989 marks (0.8826) and 0.6825 Swiss francs (0.6693).
The Australian dollar was buying $NZ1.2082 compared with $NZ1.2132 late yesterday.
The 90-day bill yields, which fell 8 basis points yesterday to 5.20 percent, were back up at 5.21 percent. The monetary conditions index tightened considerably to minus 899 (minus 957).
Bonds yields eased a little after rising in tandem with a big rally in US treasuries. The March 2002s yields rose to 5.05 per cent (5.06), the April 2004s to 5.40 per cent (5.34), the November 2006s to 6.05 per cent (5.99) and the November 2011s to 6.56 per cent (6.50).
- NZPA
<i>Currency:</i> Kiwi supported by Contact takeover bid
AdvertisementAdvertise with NZME.