The New Zealand dollar received a chorus of approval yesterday from commentators who expect the currency to perform moderately well as the year continues.
At 5pm the kiwi traded at US43.80c, slipping back from its weekend range of US43.78-US44.10c and down from Friday's close of US43.88c, while the aussie was at US52.99c from Friday's close of US53.05c.
Investment bank Goldman Sachs said in its weekly Forex Analyst report today that the kiwi was likely to outperform the aussie during the year.
Although downsizing its three, six and 12-month targets for the kiwi to US47c, US48c and US52c respectively, Goldman Sachs said it expected a "slightly stronger" performance from the kiwi in relation to the aussie in the months ahead.
Deutsche Bank said in a commentary yesterday that the kiwi was likely to be contained at current levels by factors such as uncertain world prices for exports, a forecast rise in the New Zealand current account deficit over the first half, a weak Japanese economy, and contracting interest rate differentials between New Zealand and the US.
However, Deutsche Bank said all but the last of those factors were likely to become less influential in the second half of the year, paving the way for a move higher.
ANZ Investment Bank foreign exchange dealer Richard Marshall said the kiwi saw a high of US43.90c during the day.
"There was a decent (trade) out of Tokyo at the US43.65c level which got the market a bit short, then we rallied up to US43.90c. But they both are looking a bit soggy on the close, the aussie and the kiwi.
"I think they're going to test the down side overnight, I think kiwi will go down towards US43.50c, and the aussie down to US52.70c.
"It's a short week so it's an excuse to do nothing," he said.
Markets are closed on Friday, and again on Monday, for the Easter holiday.
On Wednesday, December quarter balance of payments figures and February merchandise trade figures will be released, while on Thursday Statistics New Zealand releases gross domestic product figures for the December quarter, and the National Bank puts out its business outlook survey.
On the crosses at 5pm the kiwi traded at A82.57c (A82.75c at Friday's close), 0.4998 euro (0.4976), 58.15 yen (58.04 yen), 30.75 pence (30.74) and 0.7305 Swiss francs (0.7279).
The aussie was at $NZ1.2098 ($NZ1.2086).
The monetary conditions index tightened slightly to minus 514 (minus 517), the trade weighted index was at 53.01 (52.99), and 90-day bank bills were at 5.56 per cent (5.55).
On the debt market, the April 2004 bonds were at 6.38 per cent (6.40), the November 2006s were steady at 6.89 per cent (6.88) and the November 2011s were at 7.00 per cent (6.99).
- NZPA
<i>Currency:</i> Outlook moderately rosy for NZ dollar
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