The New Zealand dollar made slight gains today on US dollar weakness but it continued to underperform on the crosses.
By the 5pm local close today in Wellington the kiwi was at US59.84c from US59.55c at the same time yesterday, while the aussie was at US69.05c (US68.53c).
ANZ Investment Bank head of foreign exchange John Body said the kiwi traded in a range today of US59.76c to US59.93c.
Mr Body said the kiwi's progress today was "a continuation of the underperformance we've seen over the last three or four days where despite an overall US dollar weakness, the kiwi has failed to grind out any gains".
He said this was due in part to a reassessment by some international investors that the Australian dollar had potential to outperform the kiwi in the current global growth environment.
"So we've seen quite a bit of positioning out of kiwi into aussie and that's generating an overhang of supply in the kiwi."
Mr Body noted the kiwi had lost ground against the aussie in recent days, falling to A86.67c by 5pm today from the A88c mark just over a week ago. The kiwi was also losing ground against the euro and other crosses.
Nevertheless Mr Body said the fundamentals still suggested the kiwi would continue to rise.
"I think the kiwi will play catch up at some stage but that's probably going to take two or three days", he said.
Mr Body expected the kiwi to trade in a range tonight of US59.75c to US60.10c.
Meanwhile in Wellington by 5pm the euro was at US$1.1789 from US$1.1710 late yesterday, while the US dollar was at 109.62 yen (110.02).
On the crosses at 5pm the kiwi was buying A86.67c (A86.91c), 65.60 yen (66.14), and 0.5077 euro (0.5088), against the sterling it was buying 35.92 pence (35.57), and 0.7862 Swiss francs (0.7866).
The Australian dollar was buying $1.1536 ($1.1509).
The monetary conditions index was at plus 217 (221), the trade-weighted index was at 61.84 (61.86), and 90-day bank bill yields were at 5.19 per cent (5.18).
The February 2005 government bond yields were at 5.35 per cent (5.30), the November 2006s were at 5.64 per cent (5.56), and the November 2011s were at 5.98 per cent (5.90).
- NZPA
<i>Currency:</i> Kiwi underperforms on crosses
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