The New Zealand dollar failed to hold above US48c after it had rallied in the morning on Wall Street's roll but worries about the ramifications of the Bali bombing weighed it down.
After having a peek at US48.10c yesterday morning, it fell back to US47.85c, virtually unchanged from Friday's closing level.
The Australian dollar also dropped, to US54.58c from its US54.90c opening and US54.75c close on Friday with dealers saying the terrorist action in Bali had put some investors off.
"It's more a lack of buying of the Australasians' currencies based on the events in Bali," Westpac's chief dealer in New Zealand Basil Payn said.
He said the local market was in holding pattern with Monday holidays in Hong Kong, Japan, Canada and the US and awaiting a lead from major markets.
Over the weekend, a rebound on Wall St eased investor risk aversion, benefiting high-yielding commodity currencies.
This could give the kiwi the topside energy it failed to find last week, Bank of New Zealand currency strategist Stu Ritson said.
"Technically speaking, momentum and directional bias are mildly positive for the NZD, suggesting buying dips back towards US47.90c for the time being.
"We are mindful, however, that the speculative market is long and any move back through US47.80c would quickly change the outlook."
Tomorrow's Consumers Price Index was unlikely to provoke any reaction from the forex market, with economists forecasting a 0.6 per cent rise in the September quarter to give a 2.7 per cent annual rate versus 2.8 per cent in the June year.
On the crosses, the kiwi closed at 0.4843 euro (0.4852), 59.28 yen (59.30), 0.3062 pence (0.3059) and 0.7080 Swiss francs (0.7103).
At the close, the kiwi was buying A87.62c (A87.44c), but still well down from near five-year highs reached last week. The aussie was buying $NZ1.1402 ($NZ1.1436).
The New Zealand dollar trade-weighted index was little changed at 55.07 (55.05), the 90-day bill yield was at 5.89 per cent (5.87) and the monetary conditions index steady at minus 293 (minus 295).
In the bond market yields rose, with the April 2004 bond at 5.65 per cent (5.60 per cent), the November 2006 yield at 5.99 per cent (5.92 per cent) and the November 2011 bond yield at 6.24 per cent (6.17 per cent).
- NZPA
<i>Currency:</i> NZ dollar falls below US48c in wake of Bali bombing
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