KEY POINTS:
The New Zealand dollar stuck to a 25-point range today as focus trained on action among the major currencies, including a record-beating euro.
By 5pm, the kiwi was at US67.20c, up from US67.05c on Friday when it had dipped after news of the second-worst monthly trade deficit on record. Against the Aussie, the kiwi was at A86.16c from its A86.45c Friday close, and on its trade-weighted index it fell to 66.21 from 66.48.
"The range in kiwi has been very narrow," said ANZ Investment Bank foreign exchange dealer Murray Hindley, noting it would close locally around the middle of its US67.12-US67.37c band.
"It's taken a back seat to the moves in other currencies, fallen off the radar screen a little bit. We've lost ground on the crosses against euro, yen, sterling and Aussie, to a lesser degree," Mr Hindley said.
The calendar this week was light domestically, with the highlight the National Bank of NZ's monthly business confidence survey, and the kiwi's moves would be dictated by reaction to US data, he said.
"It seems well-supported at US66.80c at this stage, but it's struggling to still break that US67.40c area."
Bank of New Zealand currency strategist Danica Hampton said the kiwi had benefited recently from stability in the currency markets, which encouraged investors to take on more risk for their returns.
"However, the recent sharp fall in the USD could be the catalyst that sees greater volatility spill over into other markets. Any increase in market uncertainty is likely to decrease investors' appetite for risk, and encourage market participants to trim back 'carry trades' and other positions in peripheral currencies like the NZD," she said.
The US dollar recouped some losses after sinking to a 20-month low against the euro and a three-month low versus the yen earlier today in choppy trading after a sharp, broad-based decline late last week.
Traders said it was difficult to pinpoint what was behind the dollar's sell-off.
Reuters currency rates:
5pm today 5pm Friday
NZ dlr/US dlr US67.20c US67.05c
NZ dlr/Aust dlr A86.16c A86.45c
NZ dlr/euro 0.5118 0.5174
NZ dlr/yen 77.75 77.99
NZ dlr/stg 34.65p 34.99p
NZ TWI 66.21 66.48
Australian dollar US78.01 US77.58
Euro/US dollar 1.3133 1.2958
US dollar/yen 115.71 116.29
- NZPA