6.00pm
The New Zealand dollar sustained recent gains and edged higher today in response to renewed United States dollar weakness.
By 1pm it stood at US55.70c compared with US55.37c at closing yesterday and at the higher end of its overnight range of US55.37c to US55.79c.
Bank of New Zealand currency strategist Sue Trinh said the kiwi had broken its "down trend channel" two days ago, "and now it's just continued, and it's managed to sustain its gains mainly on the back of US dollar weakness and continuing search for yield from offshore investors".
Today's trading in the kiwi was likely to be a repeat of yesterday's, she said.
"After the run up in the overnight session we're probably going to get a bit of a quiet day especially into the end of the week with the holiday period looming. We're probably going to get a tight range, something like US55.60c-55.80."
Although there were no surprises expected from the Reserve Bank's Official Cash Rate review next week, Ms Trinh said there was still some possibility the bank would begin an easing cycle.
"The market is almost getting a bit blase about there being no cut... but it's still a risk for the kiwi going forward.
Lower interest rates would lessen the attraction of the kiwi for foreign investors.
The Australian dollar was at US61.30c at 1pm from US60.87c at local close yesterday.
In offshore trading, the US dollar slumped sharply overnight, hurt by falling equity markets and increasing concern about US economic prospects.
In Wellington at 1pm, the greenback was buying 119.53 yen from 120.29 yen at yesterday's local close, while the euro rose to US$1.0914 from US$1.0807.
On the other key crosses at 1pm, the kiwi was buying A90.96c (A90.99c at 5pm yesterday), 0.5104 euro (0.5123), 35.23 pence (35.25), 0.7643 Swiss francs (0.7703) and 66.57 yen (66.6).
The Australian dollar was buying $1.010 ($1.0995).
On the money market, 90-day bills were at 5.79 per cent (5.79 per cent), the monetary conditions index was at plus 206 (201) and the trade-weighted index was at 60.97 (60.91).
On the bond market, the April 2004 yields were at 5.44 per cent (5.49), the November 2006s were at 5.57 per cent (5.62) and the November 2011s were at 5.91 per cent (5.97).
- NZPA
<I>Currency:</I> Kiwi sustains gains ahead of Easter break
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