The New Zealand dollar saw no fireworks yesterday following the United States-led attacks on Afghanistan early in the morning, NZ time.
By 5pm the kiwi had strengthened slightly to trade at US41.55c, from Friday's close of US41.14c, while the aussie was at US50.66c from Friday's US50.12c close.
However, the kiwi had not seen much movement on the day, one local dealer said, and traded within a fairly tight US40.40/57c range.
"It had support at US40.20c and resistance on the top side of US40.60c. It's probably going to be dead overnight because there will be no US. It's closing exactly where we opened, (volume) was medium to small, it's pretty quiet.
The US and Japan markets are closed for holidays.
"Sure, all this offshore situation will definitely have a bearing on the US dollar - it's all externals factors, nothing really internally," that will move the kiwi this week," he said.
"Obviously if these (attacks) are perceived to be positive for the US then the US dollar will appreciate."
On the data front, the Institute of Economic Research's Quarterly Survey of Business Opinion - set for release on Thursday - would provide a good indication of how the economy was holding up, dealers said.
Offshore dealers said the strikes against Afghanistan were hardly unexpected, but noted the conflict looked like being a drawn out affair with the US emphasising there was no magic bullet to end it quickly while their chief target, Osama bin Laden, vowed there would be no peace for America.
Mike Moran, an economist at Standard Chartered in Hong Kong, said the New Zealand and Australian dollars, the South African rand and Asian currencies would suffer most from any global uncertainty.
On the other hand the Swiss franc and yen were likely to benefit from greenback weakness, he said.
On the crosses at 5pm, the kiwi traded at A82.00c (A82.08c at Friday's close), 49.82 yen (49.60), 28.05 pence (27.88), 0.8843 marks (0.8757), 0.6698 Swiss francs (0.6680) and 0.4521 euros (0.4477).
On the aussie-kiwi cross, the Australian dollar was buying $NZ1.2193, from $NZ1.2186 late on Friday.
The trade-weighted index was at 49.03 (48.70), while the 90-day bill yields were at 5.26 per cent (5.28). The monetary conditions index was at minus 935 (minus 966).
Among the bonds, the March 2002s were steady at 5.08 per cent (5.11), the April 2004s were at 5.33 per cent (5.42), the November 2006s were at 5.91 per cent (6.00), and the November 2011s were at 6.36 per cent (6.43).
- NZPA
<i>Currency:</i> No fireworks for NZ dollar in quiet session
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