The New Zealand dollar took a roller coaster ride today on volatility in the greenback.
By the 5pm local close the kiwi was buying US59.38c from US59.57c late on Friday, having traded in a reasonably wide US59.20c to US59.78c range today. The aussie was at US69.06c (US69.06c).
A Deutsche Bank dealer said today's session was "pretty quiet" in terms of flow, "not just in the kiwi but across most of the currency universe".
However he added that ranges had been "reasonably volatile".
The kiwi was up a bit this morning, "on news that China and the US had set up a working group to examine the obstacles standing in the way of a float of the yuan".
"That saw the US down across the board including against the kiwi."
That move was more than reversed through the mid part of the morning following comments from US Treasury Secretary John Snow, who was reported as saying there would be an inevitable rise in US interest rates as the econ omy recovered.
The dealer also said Mr Snow was reported as saying markets may have misinterpreted the recent G7 statement as signalling a desire for a weaker US dollar against floating currencies including the kiwi.
The dealer was unwilling to give a range for the kiwi in overnight trade tonight but said key support for the kiwi was at US59.20c and resistance was at US60.25c. "You'll see a quite a lot of activity when either end of that range gets broken", he said.
Meanwhile on the domestic front this week the Reserve Bank will review interest rates, making a statement on Thursday. It is widely expected to announce no change to the current 5.00 per cent Official Cash Rate.
In Wellington by 5pm the euro was at US$1.1627, from US$1.1605 late on Friday, while the greenback was at 109.72 yen (109.75).
The kiwi eased on most of the crosses to buy A85.99c (A86.27c on Friday), 65.17 yen (65.39), 0.5107 euro (0.5132), 35.47 pence (35.56), and 0.7927 Swiss francs (0.7945).
The Australian dollar was at $1.1627 ($1.1589).
The monetary conditions index was at plus 197 (213), the trade-weighted index was at 61.56 (61.78), and 90-day bank bill yields were at 5.21 per cent (5.20).
The February 2005 government bond yields were at 5.44 per cent (5.43), the November 2006s were at 5.79 per cent (5.78), and the November 2011s were unchanged at 6.10 per cent.
- NZPA
<I>Currency:</I> Roller coaster ride for kiwi on US dollar volatility
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