KEY POINTS:
The New Zealand dollar steadied today after a worse-than-expected monthly trade deficit pushed the currency off its US73c perch.
By 5pm, the kiwi was at US72.87c from US72.66c at 5pm yesterday.
It had been boosted overnight above US73c by news that dairy farmers will get a record $5.53/kg for milk solids next season.
The injection of $1.5 billion into the economy raised the prospect of another rate hike.
Against the Australian dollar, the kiwi inched higher to A88.54c from A88.44c yesterday.
The country posted a much worse than expected April trade deficit of $212 million, against the $13m average deficit forecast by economists. The deficit included a large one-off import of an oil drilling and processing vessel.
"The kiwi was up near US73c when that (data) came out, and it's just remained pretty weak overall," one dealer said.
The kiwi traded between US72.71c and US73c during the session, and was expected to remain close to that range overnight.
The US dollar steadied today ahead of data on US durable goods orders and new home sales that could reduce expectations for the Federal Reserve to consider cutting interest rates this year.
Investors trimmed yen short positions earlier in the session after former Federal Reserve Chairman Alan Greenspan said he feared a "dramatic contraction" in Chinese stocks, stirring worries over a possible sharp drop in Asian equity markets and risky positions like carry trades.
But the Japanese currency returned quickly to its broad slide as the Chinese benchmark index showed little reaction to Greenspan's fears, while Japan's Nikkei share average hovered a little lower on the day.
- NZPA