KEY POINTS:
The New Zealand dollar traded in a fairly narrow range today after being jolted by the United States dollar overnight.
At 5pm today the kiwi was trading at US69.06c from the US68.88c open but it was up strongly from the US68.35c close on Tuesday.
The local currency had been looking weak on Tuesday but it got a boost overnight from a fall in the US dollar and dealers were waiting to see if the US dollar stages a recovery tonight.
"It was a broad US dollar move that caused the kiwi to jump up like this. The kiwi jumped three quarters of a cent, it is going to be nervous on the upside," said Mark Elliott, senior dealer at ANZ Bank.
A report showing a wider US trade deficit raised worries about the US growth outlook, weighing on the greenback.
Commentary from Finance Minister Michael Cullen at a parliamentary committee today that domestic demand was high was a mild positive for the local currency.
But upcoming commentary from Federal Reserve chairman Ben Bernanke to Congress is expected to have a bigger impact.
BNZ said the New Zealand dollar is drawing additional support from speculation that Thursday's retail sales report will be strong. If it is, it will strengthen the argument for the Reserve Bank of New Zealand to raise rates again.
Against the aussie, the kiwi was buying A88.50c, unchanged from the open.
The NZ dollar was slightly up against the euro, from 0.5275 yesterday evening to 0.5298, while the trade weighted index was up at 68.69 from 68.57 yesterday.
The euro also rose against the greenback overnight after solid euro zone growth data boosted chances of a European Central Bank rate hike next month.
Reuters currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US69.06c US68.35c
NZ dlr/Aust dlr A88.50c A88.50
NZ dlr/euro 0.5298 0.5275
NZ dlr/yen 83.74 82.99
NZ dlr/stg 35.48p 35.08p
NZ TWI 68.69 68.23
Australian dollar US78.04c US77.25c
Euro/US dollar 1.3037 1.2958
US dollar/yen 121.23 121.44
- NZPA