KEY POINTS:
The New Zealand dollar traded a very narrow range again, hovering around US67c in a very quiet session.
By 5.30pm, the kiwi was at US67.02c from US67.20c at 5pm yesterday, having traded an 18-point range today.
"There's a little bit of Aussie-kiwi selling in the market at the moment, putting a little bit of pressure on that cross to the downside, so that's just giving kiwi a little bit of support," one foreign exchange dealer said.
"I think it's just people looking to put some short (positions) on, just short-term players and no-one serious."
Australia's central bank said Australia's headline inflation rate could slow to below 2.0 per cent next year as the effects of high oil and fruit prices fade from the index.
However, Reserve Bank of Australia official Tony Richards said the central bank's views had not changed from its recent monetary policy statement, when it predicted underlying inflation would remain at the top of its 2 to 3 per cent target range for the coming year.
"I think Aussie might come under a little bit of pressure. Maybe guys (are) just looking for a bit of a reaction in the Aussie, a little bit of downside, so Aussie-kiwi's a reasonably safeish sort of play," the dealer said.
He picked a range for the kiwi overnight of US66.85-US67.15c.
"No data for us, nothing important anyway, so very quiet."
Business confidence picked up but remains negative according to the National Bank's monthly survey out early today. The report failed to influence currency traders.
The US dollar held near a 20-month low against the euro today as investors traded on stagnating interest rates in the United States and rising yields in the euro zone.
The euro also scaled another record high versus the yen, supported as euro zone finance ministers meeting in Brussels suggested they were not overly concerned about the single currency's strength.
The European Central Bank will almost certainly bump up rates to 3.5 per cent at its policy meeting in December and is expected to keep hiking rates next year, closing the gap on the 5.25 per cent targeted by the Federal Reserve since late June.
For clues about the outlook for US rates, the market was waiting for a bevy of data this week including figures on housing and manufacturing -- two sectors that have factored heavily in a slowdown in the US economy.
Reuters currency rates:
5.30pm today - 5pm yesterday
NZ dlr/US dlr US67.02c - US67.20c
NZ dlr/Aust dlr A86.04c - A86.16c
NZ dlr/euro 0.5099 - 0.5118
NZ dlr/yen 77.72 - 77.75
NZ dlr/stg 34.56p - 34.65p
NZ TWI 66.05 - 66.21
Australian dollar US77.91c - US78.01c
Euro/US dollar 1.3146 - 1.3133
US dollar/yen 115.95 - 115.71
- NZPA