The New Zealand dollar was on the up today as renewed fears of war in Iraq undermined some of the United States dollar's gains from last week.
By 5pm the kiwi was at US55.46c, well up on Friday's close of US54.79c. The aussie rose to US60.12c, from US59.53c at the end of last week.
ANZ Investment Bank chief foreign exchange dealer Murray Hindley said the kiwi saw "pretty much one-way traffic north" today.
The kiwi traded between US55.07/57c, a range wider than most seen recently.
"Obviously with the war jitters resurfacing we've seen a bit of strength in aussie and euro," Mr Hindley said.
"There was some reasonable interest from Asia today, which pushed (kiwi) during the afternoon session from US55.25c to the high of US55.57c.
"I think it's going to be supported on dips (overnight), depending on what's going to happen with the Iraq situation. There's a little bit of resistance at US55.60c at this stage."
Bank of New Zealand currency strategist Stu Ritson said the bank continued to see the outlook for the kiwi as positive.
"Despite last week's sharp move lower, there really has not been a change to the fundamental landscape," he said in a daily commentary.
"As the timetable to war became the great unknown, the nasty selloff was not New Zealand dollar specific, the contagion of position squaring in the face of heightened uncertainty left its mark across a wide spectrum of financial markets (last week).
"Accordingly, the very drivers that have underpinned the New Zealand dollar since the lows in August 2002 remain intact."
The US dollar softened across the board today after US President George W Bush gave the United Nations just one more day to find a diplomatic solution to the Iraqi crisis before resorting to military action.
In Wellington the US dollar eased to 117.92 yen by 5pm, from 118.15 yen on Friday. The euro gained to $US1.013 ($US1.0807 on Friday).
Against its main trading partners at 5pm the kiwi was buying A92.26c (A92.05c), 0.5129 euro (0.5070), 0.7524 Swiss francs (0.7441), 65.39 yen (64.74) and 34.91 pence (34.21).
The Australian dollar softened slightly to $NZ1.0846 ($NZ1.0865).
On the money market, 90-day bills were at 5.81 per cent (5.85), the monetary conditions index was at plus 200 (plus 151), and the trade-weighted index was at 60.83 (60.22).
Long-dated bonds strengthened today with the April 2004 government bonds at 5.42 per cent (5.45), the November 2006s at 5.46 per cent (5.51) and the November 2011s at 5.82 per cent (5.90).
- NZPA
<i>Currency:</i> Kiwi up as renewed war fears squash Greenback
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