Just one seller prevented the New Zealand dollar breaking higher, and it closed looking soft.
The kiwi finished at 44.98USc (44.86c on Monday). That is well up on Friday night when it sniffed the post-1985 float low of 44.60c.
"The market was caught short in the morning, but very happily for them an aussie-kiwi buy order went through," a currency dealer said.
The order to buy Australian dollars and sell kiwi may have been related to Telecom's announcing it would mop up stock not already owned in Australian telco AAPT at a cost of $A444 million.
"If it hadn't been for that we would have actually spiked up a bit higher, got through some levels and had a bit of fun. But really all it did was contain our market in a fairly tight range," the dealer said.
The rest of the day was quiet, with the kiwi not "looking very clever."
The dealer said the Reserve Bank in its monetary policy statement today would either leave its official cash rate unchanged at 6.50 per cent with a hawkish commentary, or lift it to 6.75 per cent. "That will be bad for kiwi," the dealer said, referring to the latter course.
Economists are mixed on whether the RB will hold or raise interest rates, with inflation seen breaching its 0-3 per cent target range but business confidence in a slump.
In its daily comment, HSBC said it did not expect a rise.
"Soft employment and retail sales data, the slump in business and consumer confidence, easing in capacity constraints, the prospect of a negative Q2 GDP outcome and recent comments by Governor [Don] Brash on inflation all support this view."
- NZPA
<i>Currency:</i> Sole seller keeps kiwi on skids
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