The New Zealand dollar was directionless on the local currency market yesterday, a foreign exchange dealer said.
The kiwi traded in a tight 45.30-45USc range, closing lower at 45.36USc from its 45.51c close on Tuesday.
"Trading has been featureless, with very light volumes. The kiwi has been directionless," the dealer said.
The market appeared to be waiting for the Reserve Bank to release its Monetary Policy Statement next week, he said.
The Australian dollar also dropped yesterday, to 58.35USc from 58.76c. On the cross rate, the kiwi was at 77.74Ac.
US Treasuries rose after a five-year note sale drew the strongest demand since 1997 followed by bullish reports on productivity and labour costs.
The most actively traded 10-year note's yield fell three basis points to 5.92 per cent, near a four-month low. The current 30-year bond yield fell two basis points to 5.73 per cent.
Meanwhile, the euro languished in tense trade in Tokyo as markets grew more confident that a soft-landing for the buoyant US economy would make its assets more attractive compared to the euro zone.
Dealers said investors were losing faith in the euro, having been burned by its relapse to near-record lows in recent weeks.
- NZPA
<i>Currency:</i> US provides all the action
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