KEY POINTS:
The New Zealand dollar rose slightly today after retracing from a brief foray above US70c for the first time since the start of March over the weekend.
The New Zealand dollar rose to US69.78c at 5pm from the US69.48c open, which compared to the US69.55c late on Friday afternoon.
The local currency is caught in a rip between the currents of high yields and oscillating risk appetites, according to ANZ economists.
"With the New Zealand dollar grinding up last week courtesy of yield, the story this week looks to be about risk," ANZ said.
The kiwi dollar tumbled earlier this month as speculators trimmed positions built up in so-called carry trades, between low yielding and high yielding currencies, when equity markets showed signs of melting down.
But it was on the rise again last week as the carry trade unwinding eased.
During the weekend, it got a boost after the US dollar fell to a three-month low against a basket of currencies.
The US dollar is being weighed down by concerns the growing crisis in the US subprime mortgage market could curb economic growth.
ANZ said the domestic story remains one of yield-related support after the central bank raised rates. But the international story was one of unease.
Bank of New Zealand currency strategist Danica Hampton said the firmer tone for the kiwi was aided by strong gains for the Australian dollar.
Against the Australian dollar, the kiwi's ride was less bumpy than against the greenback, having started to decline from above A88.25c early on Friday.
It opened around A87.57c today and ended at A87.70c, down from late Friday's A87.88c level.
Against the euro, the NZ dollar rose to 0.5245 from 0.5217 this morning, and from 0.5232 at 5pm on Friday.
The trade weighted index was at 68.41 from 68.26 on Friday.
BNZ said the New Zealand dollar will struggle against headwinds on any moves above 70c on its US cross rate.
"The speculative community is already long New Zealand dollars," it said.
Rates:
5pm today 5pm Friday
NZ dlr/US dlr US69.78c US69.55c
NZ dlr/Aust dlr A87.70c A87.88c
NZ dlr/euro 0.5245 0.5232
NZ dlr/yen 81.87 81.40
NZ dlr/stg 35.95 35.89p
NZ TWI 68.41 68.26
Australian dollar US79.56 US79.13c
Euro/US dollar 1.3306 1.3294
US dollar/yen 117.30 117.04
- NZPA