KEY POINTS:
The New Zealand dollar was unmoved by today's budget.
"A big zero reaction," said ANZ dealer Mark Elliott.
It closed little changed from its opening on US73.35c against US73.75c at the same time yesteday.
The kiwi fell sharply overnight after jitters among carry trade investors sent the New Zealand and Australian dollars down sharply.
Mr Elliott said there was little on the local scene currently affecting the kiwi. It was all about the US dollar, he said.
Standard & Poor's said there was nothing in the budget to affect New Zealand's credit rating.
Economists said the budget was not inflation and therefore should not add upward pressure on the currency.
ANZ Bank said selling pressure on the antipodean currencies had started with stronger than expected US data, feeding into greenback strength.
But it was comments from the Japanese trade minister and recommendations by some overseas investment institutions to exit carry positions that really saw the action, ANZ said.
The NZ dollar fared slightly better than its partner across the Tasman as weaker than expected Australian first quarter wage data saw the market pare back expectations of an Australian interest rate hike.
Against the aussie the NZ dollar was buying A88.72c from A88.62c at 5pm yesterday, while against the greenback the aussie slipped from US83.23c to US82.65c.
The trade weighted index closed on 71.35 from 71.49.
In major currency trading, the yen hit a three-month low against the dollar, getting little reprieve even though first-quarter growth data was near expectations, keeping the Bank of Japan on track to lift interest rates later this year.
Japan's gross domestic product expanded at an annualised 2.4 percent in the January-March quarter, just below expectations for 2.7 percent. A surprising fall in capital spending was offset by solid consumer spending.
The euro also inched up to $US1.3527 from $US1.3520 in late New York trade.
The dollar rebounded after reports showing a surprising rebound in housing starts and stronger-than-expected industrial production cooled some expectations for the Federal Reserve to trim rates later in the year to shore up the economy.
Reuters currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US73.35c US73.75c
NZ dlr/Aust dlr A88.72c A88.62c
NZ dlr/euro 0.5423 0.5426
NZ dlr/yen 88.62 88.67
NZ dlr/stg 37.07p 37.17p
NZ TWI 71.35 71.49
Australian dollar US82.65c US83.23c
Euro/US dollar 1.3527 1.3593
US dollar/yen 120.79 120.26
- NZPA