The New Zealand dollar was treading water just below US50.30c yesterday as the US50.50c-mark proved too much of a barrier to overcome.
By 5pm the kiwi dollar was buying US50.25c, above its Friday close of US50.12c, but little changed on its opening level of US50.21c.
Its Australian trading mate was at US56.33c (US56.11c).
During the weekend the kiwi was capped in the same range as financial markets tried to figure out the implications of the resignation of US Treasury secretary Paul O'Neill.
"There's an increasing sense now that with the changing of the guard, there'll be less emphasis on the US dollar being strong," said ANZ Investment Bank's head of foreign exchange, John Body.
"Therefore, we would expect to see peripheral currencies like the kiwi and the aussie be stronger against the US dollar than they have been before."
But with Christmas looming, the local unit might not break the psychological US50.50c level in the near term.
"That's proving a pretty big hurdle for the kiwi at the moment," one dealer said.
The kiwi was expected to range between US50.10c and US50.45c overnight.
Against its key trading partners the kiwi was buying A89.22c (A89.33c), 0.4970 euro (0.5002), 61.76 yen (62.75), 31.81 pence (32.91), and 0.7311 Swiss francs (0.7361).
The Australian dollar was at $NZ1.1209 ($NZ1.1194).
The trade weighted index slipped to 57.07 (57.30), the monetary conditions index was at minus 109 (minus 89), and the 90-day bank bill yield was at 5.92 per cent (5.94).
On the bond market, the April 2004s were at 5.75 per cent (5.76), the November 2006s were steady at 5.98 per cent, the November 2011s were at 6.29 per cent (6.30), and the April 2013s were at 6.34 per cent (6.35).
- NZPA
<i>Currency:</i> Kiwi treads water as US50.50c proves hard to crack
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