The New Zealand dollar closed firmer yesterday, consolidating in light trade after last week accompanying its Australian counterpart to fresh depths.
The kiwi finished at 40.29USc from 40.19c on Friday.
That is well up on its most recent historic low of 39.90USc set amid Reserve Bank Governor Dr Don Brash's reference to "stagflation" - or negative growth with high inflation - and a surprise decision by his Australian counterparts not to raise interest rates.
"The aussie's done very little which has lent little in the way of direction for the kiwi," a currency dealer said. "There seems to be a good base forming under US40c."
However, the transtasman currencies remained in an overall downtrend. Bank of New Zealand said that if the kiwi broke 39.90USc from a technical point of view it would likely trigger a fall to 38.75USc.
The dealer explained the local unit's strength yesterday in what was a thin, flow-driven market as reflecting some shakiness underlying the apparently unassailable US dollar as equity markets fell on more tech stock earnings warnings.
He said that apart from that, some renewed optimism over the future ownership of Fletcher Energy provided some support. Any foreign buyer would be a big New Zealand dollar buyer.
This week is light on local economic data, but next week sees rather more interesting data - third-quarter inflation numbers and a major survey of business opinion.
- NZPA
<i>Currency:</i> Troubled kiwi finds foothold
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