KEY POINTS:
The New Zealand dollar closed below US74c today after bettering that mark overnight.
In listless trading, it closed on US73.97c from US73.69c at 5pm yesterday.
Bank of New Zealand currency strategist Danica Hampton said the market had pretty much shrugged off yesterday's lacklustre labour market data.
At face value, the numbers were unequivocally softer than expected, and at the margin appeared to have eased pressure on the Reserve Bank to tighten New Zealand interest rates again, she said.
The kiwi had benefited overnight from a generally weaker US dollar and solid demand from Japanese and Asian accounts.
It appeared that Japanese and Asian investors had returned from the Golden Week holidays with an avid appetite for high-yielding currencies such as the NZ dollar, Ms Hampton said.
The kiwi closed on 88.65 yen, up from 88.36 yen at 5pm yesterday.
It was also slightly firmer against the euro but easier against the Australian dollar, buying 0.5432 euros from 0.5418, and A89.12c, from A89.36c. The aussie rose on strong consumer spending data. A surprisingly strong 1.1 per cent rise in March retail sales provided a solid base for economic growth in the first quarter and led investors to expect further growth.
The trade weighted index was at 71.62 this morning from 71.47.
Ms Hampton said the NZ dollar had been weighed down a little by active selling of the kiwi against the aussie.
The US dollar edged lower against major currencies ahead of three central bank meetings that may underscore market expectations for US interest rates to fall this year as rates in other major economies rise. While the Federal Reserve is seen holding benchmark short-term rates at 5.25 per cent after its meeting on Wednesday, analysts say officials may mention signs of slower US growth after recent data revealed anaemic job growth in April, which would weigh on the dollar.
The euro closed on US$1.3616 edging near a lifetime high above $1.3680.
The European Central Bank is expected to hold rates steady at 3.75 per cent on Thursday but to signal a hike in June.
- NZPA