KEY POINTS:
The New Zealand dollar traded a narrow range today in a quiet start to the week, reflecting the lack of momentum in world currency markets.
By 5pm, the kiwi had lifted a touch to US73.10c from US72.90c late on Friday afternoon. Against the Aussie, the kiwi was at A88.77c from A88.62c on Friday.
The market was absorbing Friday's news that the People's Bank of China took its most aggressive tightening steps in four years, raising deposit and lending rates as well as the proportion of deposits that banks must hold in reserve.
The moves were aimed at dampening China's property and sharemarkets, but many investors expected China's central bank to keep intervening.
BNZ said the kiwi held up relatively well despite China's surprise policy changes.
The cross with the yen was the most affected. Against the yen, the kiwi was at 88.65 this afternoon from 88.41 on Friday, having been knocked to 87.80 during the weekend.
Currency markets were stuck in a transition period, Westpac currency strategist Michael Gordon said.
"What had been a clear theme of buying high-yield currencies and selling US dollars through March and April has turned into more of a directionless grind through May," Mr Gordon said.
"We think the next move is more likely to be a reversal than a renewal of the previous trend."
The New Zealand dollar was better placed than most high-yielders, he said, with the Reserve Bank likely to remain concerned about inflation and possibly headed for another tightening.
The week ahead is quiet on the data front.
- NZPA