The New Zealand dollar was pinned in a tight range yesterday, but looked like it had enough oomph to clear the US43c level again.
At 5pm the kiwi traded at US42.80c, down from US42.85c at Monday's close, while the aussie had risen to US52.18c (US52.08c).
One local dealer said the kiwi traded between US42.74/88c yesterday.
"It's just stuck in a pretty tight range, really. It does appear to be consolidating a little bit, it's held on quite well despite having retraced below the US42.70/80c level, which we perceived as a break level on the way up," the dealer said.
"The fact that it hasn't carried on when it has gone down through there, it makes it look all right for another test of US43c at some stage in the not so distant future."
He picked a range overnight of US42.70c and US43.10c.
Terms of trade data for the December quarter out this morning had no impact on the kiwi.
New Zealand's terms of trade fell 2.2 per cent in the December quarter, a much sharper drop than economists had forecast.
The index, which measures how much a fixed quantity of exports buys against a fixed quantity of imports, was forecast by economists to only fall 0.8-1.0 per cent in the quarter.
Offshore, the Japanese yen was the main story in world currency markets overnight as it firmed against the US dollar on talk of Japanese capital repatriation before the end of the fiscal year on March 31.
That overshadowed Japanese official warnings about the yen's recent steep rally. At 5pm the greenback traded at 128.77 yen, from Monday night's 128.92 yen.
On the crosses the kiwi was buying A82.04c (A82.29c at Monday's close), 55.10 yen (55.26), 30.15 pence (30.14), 0.7193 Swiss francs (0.7226), and 0.4894 euro (0.4899).
The aussie was at $NZ1.2193 ($NZ1.2153 at yesterday's close).
The trade weighted index was at 51.65 (51.70), the monetary conditions index was at minus 676 (minus 670), and 90-day bank bills were at 5.25 per cent (5.22).
On the debt market the April 2004 bonds were at 5.96 per cent (5.94), the November 2006s were at 6.64 per cent (6.62), and the November 2011s were unchanged at 6.90 per cent.
- NZPA
<i>Currency:</i> Rangebound kiwi may break out above US43c
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