The New Zealand dollar traded in a narrow band today but was likely to make a bid above US58c during the long weekend.
At 5pm, the kiwi was buying US57.79c, well up from its US57.28c close yesterday. The aussie was at US65.32c, recovering from its hammering yesterday on a widened trade deficit which squashed it to US64.71c.
Bancorp Treasury Services director Jon Clarke said the kiwi ranged today between US57.75/90c.
"As usual, most of the volatility has occurred in the overnight market, and probably the key still remains the movement towards the weaker US dollar, and therefore a firmer euro, aussie and kiwi.
"The one interesting thing from a New Zealand point of view was the reasonably well-bid bond tender yesterday, it just sends a signal that there's still good demand for New Zealand high yields," Mr Clarke said.
More than $1 billion in bids was tendered for the $250 million in government stock on offer.
He picked the kiwi to trade above US58c offshore during the weekend.
The New Zealand market will be closed for Queen's Birthday on Monday. On Thursday, the Reserve Bank of New Zealand will release its latest decision on interest rates with most analysts picking a 25-point cut to 5.25 percent.
In Tokyo today, the euro regained its footing, but the market was wary of chasing it on rallies due to a possible credit easing by the European Central Bank next week.
In Wellington at 5pm, the euro was at $US1.1868 from $US1.1751 yesterday, while the US dollar was at 118.32 yen (118.78).
On the crosses at 5pm, the kiwi was buying 0.4873 euro (0.4874), 68.44 yen (68.04 yen), 35.03 pence (34.99), and 0.7449 Swiss francs (0.7434).
The monetary conditions index was at plus 169 (150), the trade-weighted index was at 61.16 (60.92) and 90-day bank bill yields were at 5.25 percent (5.26).
The February 2005 yields were at 4.87 percent (4.91), the November 2006s were at 5.01 percent (5.08), and the November 2011s were at 5.32 percent (5.39).
- NZPA
<I>Currency:</I> Kiwi treads water, gets set to surge over US58c
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