After its rapid rise, the New Zealand currency took a breather today, closing just above US44c.
While good demand for the kiwi continued, it pulled back a little, partly due to dealers buying more Australian dollars on the aussie-kiwi cross, a dealer said.
As had been the case for several days, he said, the rising euro was "holding the key" to the kiwi's fortunes.
On August 30 the European Central Bank will meet to consider interest rates, but in the meantime, the kiwi is expected to continue consolidate around current levels.
Today the New Zealand dollar traded in a tight range around US43.95-44.25c.
It toppled from its six-month high last night of US44.50c, and at 9am hovered at US44.20c, while the aussie was at US53.38c.
But by closing time the kiwi had fallen to US44.06c and the aussie strengthened to US53.57c.
Across the Tasman, there was concern that the Australian dollar was also slipping. Like the kiwi, it also slid from a six month high yesterday, dropping 35c, its biggest drop in three weeks. The aussie fell over a report which indicated growth was slowing in Europe's largest economy, another sign global demand for Australia's exports will remain subdued.
Tonight the dealer picked the kiwi to hold around the 43.85-90 range. Observers are beginning to talk of the New Zealand dollar rising as high as US45-50c. "The way the US is looking it's probably going to keep going (down), the US economy doesn't look very good at all," said one currency analyst this morning.
The euro closed at US91.35c, down from yesterday's close of US92.62c.
On the crosses at 5pm the kiwi was at A82.28c (A82.55c at yesterday's close), 53.03 yen (53.15), 30.39 pence (30.55), 0.9433 marks (0.9467), 0.7337 Swiss francs (0.7350), and 0.4823 euros (0.4840).
The aussie was buying $NZ1.2155, up from $NZ1.2115 yesterday.
The trade-weighted index slipped from a 13-month high of 51.84 this morning, to close 51.67.
Ninety-day bills rebounded to 5.85 percent, having eased sharply to 5.75 percent, and the monetary conditions index was at minus 613.
On the bond market, the March 2002s were at 5.75 percent (5.74), the April 2004s were at 6.29 percent (6.27), the November 2006s were at 6.48 percent (6.44), and the November 2011s were at 6.64 percent (6.60).
- NZPA
<i>Currency:</i> Kiwi takes a breather
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