Low holiday volumes continued to keep the New Zealand dollar trapped within a 20 point range yesterday.
At 5pm the kiwi traded at US41.53c, just shy of Thursday night's close of US41.51c, while the aussie was at US50.82c, barely moving from its US50.75c close last night.
One dealer said the kiwi tracked the aussie all day , both currencies suffering slightly at the expense of the "big dollar story" of US currency.
"It was just thin Christmas markets...and initially I think the market got itself a little bit long so people (were) just selling out of their positions on the way down and it's just bounced from there."
Bank of New Zealand forex manager Greg Ball said the kiwi had been pegged back by typical Christmas trading.
"I think next week will be similar, but a break of those two areas (US41.25c and US41.75c) and we may see a little bit of action, given the market could be a bit illiquid."
The next support level for the kiwi below US41.25c is US40.80c.
Internationally, all eyes were still on the yen which broke for its New Year holiday break on a slightly more positive note after reaching three year lows against the greenback on Thursday.
It closed here at 131.15 yen compared with 131.44 yen the previous day. Trading resumes in Japan on January 4.
The euro closed at 0.4700 against the greenback (0.4714 yesterday) but US dollars were still the currency of choice for nervous investors.
Last night's session may see interest sparked by the release of a slew of US data, including November durable goods, weekly jobless claims - expected to rise - and December consumer confidence, also expected to rise.
Dealers, however, picked the kiwi to trade between US41.35-65c.
The kiwi eased against most currencies on the crosses at 5pm, buying A81.72c (A81.79c at 5pm yesterday), 54.47 yen (54.55), 28.62 pence (28.60), 0.9191 marks (0.9221), 0.6962 Swiss francs (0.7017) and 0.4700 euros (0.4714).
The Australian dollar strengthened to buy $NZ1.2238 ($NZ1.2227).
The trade-weighted index was at 50.35 (50.39), the 90-day bank bills were unchanged at 4.88 per cent and the monetary conditions index eased slightly to minus 842 (minus 837).
On the debt market the March 2002 bonds were steady at 4.75 per cent, the April 2004s were at 5.64 per cent (5.69), the November 2006s were at 6.29 per cent (6.33), and the November 2011 were at 6.77 per cent (6.81).
- NZPA
<i>Currency:</i> Kiwi trapped by low Christmas trading
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