WELLINGTON - The New Zealand dollar bounced to a higher close yesterday after late buying impacted on an illiquid market.
The kiwi ended at 51.31/38USc from 50.86/93c at close Tuesday.
A trader said the unit was quiet in early trading then squeezed higher in the afternoon session, giving it a half a cent range on the day.
"The market's been incredibly illiquid and locals have just been squeezing it on the topside and it got a bit of momentum going," he said.
The kiwi's rise was aided by gains in the Australian dollar after strong retail data offset disappointment at the size of a widely expected hike in official interest rates.
The Reserve Bank of Australia raised its official cash rate by 25 basis points.
The aussie had risen immediately ahead of the announcement on hopes of a 50 basis point rise and fell after the smaller hike was revealed.
But news of a higher-than-expected rise in September retail sales partly offset this, with talk of the RBA lifting rates again as early as February.
The debt market was subdued despite the Australian rate rise and US bond yields hitting four week lows overnight.
The 90-day bill rate was up at 5.29 per cent from 5.27 per cent. - NZPA
Kiwi squeezed up half a cent
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