The New Zealand dollar closed on its highs yesterday as a handful of offshore investors re-entered the fray.
At 5pm, the kiwi was at US40.46c - just shy of a day high of US40.55c and up from US39.98c at Monday's close.
"We have seen a bit of interest in terms of offshore buyers putting bids in at lower levels that has provided (kiwi) with a bit of support," one local currency dealer said.
"The euro has held, the aussie has been bid again and that has flowed through to the kiwi."
The European unit closed locally at US91.57c (US91.39c), while the Australian dollar was at US49.37c (US48.74c).
Dealers expected the kiwi to trade between US40.30c and US40.80c overnight, although further downside risk remained.
The only news due for release on the local front this week is the June quarter gross domestic product (GDP) data on Friday.
Outside of that, investors would be keeping a close eye on movements in US share and forex markets and oil prices, dealers said.
"People will be looking to see what sort of announcements and actions we get out of the States.
"Stocks are down and oil is a bit of a concern - if that is a barometer of global demand then I think there will be a few concerns on that front as well."
World oil prices plunged by 13 per cent on Monday to their lowest level for 17 months in the biggest price collapse in a single day since the Gulf War over 10 years ago.
The drop was triggered by growing confidence that the US-led war on terrorism will not crimp precious Middle Eastern oil exports to the West. Fears of a faltering global economy also helped tip prices decisively lower.
Meanwhile, key indexes in the United States rose overnight for the first time since the September 11 attacks on New York and Washington DC.
On Wall Street the Dow Jones industrials index surged 4.5 per cent, or 367 points, to 8603.30; the Nasdaq composite index rose 75.85 points, or 5.3 per cent, to 1499.04; and the Standard & Poor's 500 index advanced 37.59, or 3.9 per cent, to 1003.39.
The kiwi continued to weaken against its Australian counterpart today, ending at A82c (A82.03c late yesterday). On the other crosses the local unit was trading at 47.43 yen (46.55), 27.64 pence (27.46), 0.8641 marks (0.8559), 0.6471 Swiss francs (0.6331) and 0.4418 euros (0.4376).
The trade-weighted index was at 47.84 (47.37), 90-day bill yields were steady at 5.34 per cent and the monetary conditions index tightened to minus 1050 (minus 1098).
Among the bonds, the March 2002s were steady at 5.16 per cent, the April 2004s were at 5.60 per cent (5.55), the November 2006s were at 6.21 per cent (6.16), and the November 2011s were at 6.68 per cent (6.64).
- NZPA
<i>Currency:</i> NZ dollar ends on its highs
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