KEY POINTS:
A massively strong jobs report today counteracted the influence of more risk aversion for the New Zealand dollar.
It ended pretty much where it began the session at US78.55c, but had a brief sojourn above US78.90c after the much stronger than expected employment data came out.
However, internationally the mood is to back away from risk and that helped push the kiwi and Australian dollars down, ANZ chief dealer Murray Hindley said.
The jobs data, which showed job creation in the December quarter was a record 1.1 percent, against economists' forecasts of 0.4 percent, showed the Reserve Bank had no room to move, he said.
The figures helped boost the kiwi against the aussie, with the cross rate closing at A88.02c against A87.39c at 5pm yesterday.
Mr Hindley said currency traders were back to watching developments in equity markets as a barometer for movements in all other markets.
Wall Street followed up Tuesday's biggest drop in 11 months with a half percent fall overnight as concerns about a US recession linger.
ANZ said action during the past 48 hours illustrated that if global growth concerns intensified, the kiwi could be sold down aggressively.
The trade weighted index closed easier at 72.34 from 72.48 at 5pm on Tuesday.
In major markets, players are awaiting a European Central Bank policy decision for clues to whether the ECB is softening its inflation-fighting stance.
Investors are eyeing the possibility of two ECB rate cuts this year after weak figures on service sector activity in the euro zone earlier this week stoked expectations that the central bank will have to shift gears on policy.
Koji Fukaya, senior currency strategist at Deutsche Bank, said traders, especially on the equities side, were hoping for dovish comments.
- NZPA
CURRENCY RATES AT 5PM
Reuters currency rates:
5pm today 5pm Tuesday
NZ dlr/US dlr US78.55c US79.21c
NZ dlr/Aust dlr A88.02c A87.39c
NZ dlr/euro 0.5373 0.5345
NZ dlr/yen 83.52 84.57
NZ dlr/stg 40.10p 40.17p
NZ TWI 72.34 72.48
Australian dollar US89.21c US90.57c
Euro/US dollar 1.4617 1.4814
US dollar/yen 106.33 106.77
- NZPA