The New Zealand dollar spent the day mired in the upper US66c range thanks to a resurgent United States dollar ahead key US payrolls data out tomorrow.
The kiwi closed today's session at US66.98c, down on yesterday's closing level of US67.30c. At one point this morning, before the local market opened, the kiwi touched US66.15c.
The Australian dollar was down at US75.05c (from US75.69c at 5pm last night).
BNZ currency strategist Sue Trinh said the past 48 hours had seen a process of short covering in the greenback.
"What that means is that coming from a position where everyone had sold US dollars, they (investors) took a lot of that back with expectations the payrolls number on Friday is going to be quite strong.
"...that's a signal interest rates could rise soon, so that's prompted a lot of profit taking," she told NZPA, noting the greenback had appreciated against commodity currencies since January.
Ms Trinh said the kiwi could slip to US65.20c, "but that would be the extent (of the fall)... with initial support at US66.00/15c".
Another analyst said the foreign exchange markets were gearing up for "reasonably bullish" payroll numbers.
He said the danger was that if the payroll numbers were disappointing there could be an aggressive sell-off of the US dollar.
Meanwhile, the euro was at US$1.2170 (US$1.2188), while the greenback was fetching 110.16 yen (110.18).
Ms Trinh said the market was also looking ahead to the Reserve Bank of New Zealand's March 11 monetary policy statement, which most watchers believed would see the official cash rate (OCR) lifted to 5.50 per cent.
On Wednesday, the Reserve Bank of Australia held its OCR at 5.25 per cent.
Meanwhile, on the crosses the kiwi was fetching A89.26c (A89.03c), 0.5505 euro (0.5524) 73.78 yen (74.16), 36.66 British pence (36.65) and 0.8690 Swiss Francs (0.8747).
The trade-weighted index fell to 67.42 (67.62), while the monetary conditions index was at plus 697 (708).
The 90-day bank bill yields were at 5.66 per cent (5.65).
The February 2006 yields were at 5.58 per cent (5.57), July 2009 bonds were at 5.81 per cent (5.77), and the April 2013s were at 5.95 per cent (5.92).
- NZPA
<i>Currency:</i> NZ dollar trades in upper US66c region
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