KEY POINTS:
The New Zealand dollar ended the week above US69c after Reserve Bank governor Alan Bollard's hawkish Monetary Policy Statement yesterday gave the currency solid underpinning.
There was a brief morning sell-off today when offshore markets misunderstood some comments Dr Bollard made on currency intervention by a wire service.
The governor explained the circumstances of intervention but some traders interpreted that as a signal he was poised to move.
By 5pm the kiwi was back at its opening level of US69.05c against US68.60c shortly after 5pm yesterday.
It ended the session against the Australian dollar on A87.38c from A87.09c and on the trade-weighted index on 67.52 from 67.12.
ANZ Bank chief dealer Murray Hindley said immediate direction would depend on US non-farm payroll data which would give a handle on how strong the economy was.
However, with the Reserve Bank factoring in another rate rise in the first half of 2007, the kiwi was well underpinned, with support at US68.80c and US70c well and truly opened up as an immediate target.
For the local market, the main interest next week will be terms of trade data on Monday, which will give more information on how tough exporters are doing it in the high currency environment.
The US dollar was sitting tight ahead of US jobs data to see if a slowdown in the economy would prompt the Federal Reserve to cut rates next year.
Major currencies barely moved after the European Central Bank followed up a widely expected rate rise to 3.5 per cent on Thursday with a statement that left the door open to more rises next year.
The yen showed limited initial reaction to revised data showing that the Japanese economy grew slightly less than expected in July-September from the previous quarter, as it did little to change market expectations that rates will soon rise, perhaps later this month.
Rates:
5pm today 5.10pm yesterday
NZ dlr/US dlr US69.05c US68.60c
NZ dlr/Aust dlr A87.38c A87.09c
NZ dlr/euro 0.5196 0.5162
NZ dlr/yen 79.55 78.93
NZ dlr/stg 35.18p 34.88p
NZ TWI 67.52 67.12
Australian dollar US78.99c US78.79c
Euro/US dollar 1.3286 1.3289
US dollar/yen 115.25 115.13
- NZPA