KEY POINTS:
The New Zealand dollar today pulled back from 10 month highs ahead of a crucial statement by the Reserve Bank tomorrow morning.
The kiwi closed on US68.65c compared with US68.86c at 5pm yesterday after earlier hitting a 10-month high of US69.10c.
ANZ chief dealer in New Zealand Murray Hindley said his bank was predicting no change in the Official Cash Rate.
"The wording of the text will be the key. Given the recent data, it could be heavily worded," he said.
If bank governor Alan Bollard keeps the door open to a rate rise, the kiwi will remain supported.
Resistance ahead of the statement is seen at US69.10c and support at US68.60c.
The kiwi eased against the Australian dollar, ending at A87.20c from its A87.47c opening and against A87.42c yesterday.
Australian GDP rose 0.3 per cent in the third quarter compared with a median market estimate of 0.5 per cent to leave annual growth at 2.2 perecent.
The Reserve Bank of Australia (RBA) earlier left interest rates steady as it waits to find if three previous rises this year slowed the economy enough to tame inflation.
The Australian dollar ticked up following the GDP figures. After falling overnight from yesterday's US79.50c to US78.69c, it lifted to close on US78.90c.
The US dollar steadied after surprisingly strong service sector data suggested the US economy may be holding up better than previously thought, helping to put the brakes on the past month's sharp sell-off.
But the US currency, which slid around 3 per cent against the euro and the yen since late November, lingered near a 20-month low against the euro and a four-month trough versus the yen on expectations the Federal Reserve will cut interest rates next year.
The yen remained supported despite Bank of Japan Policy Board member Kiyohiko Nishimura saying that uncertainties about current economic conditions and the outlook in Japan were growing due to factors such as slow growth in personal consumption.
The euro/dollar was largely unchanged on the day at US$1.3320, in sight of a 20-month high of US$1.3370 hit at the start of the week.
Reuters currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US68.65c US68.86c
NZ dlr/Aust dlr A87.20c A87.42c
NZ dlr/euro 0.5156 0.5172
NZ dlr/yen 78.90 79.53
NZ dlr/stg 34.82p 34.86p
NZ TWI 67.12 67.37
Australian dollar US78.75 US79.50c
Euro/US dollar 1.3320 1.3322
US dollar/yen 114.85 115.35
- NZPA