KEY POINTS:
The New Zealand dollar trod a narrow range today, settling after a volatile week as investors sat back ahead of key United States data .
By 5.15pm, the kiwi was at US76.80c, little changed from this morning's level but higher than late yesterday's US76.23c. Today's range was a relatively tight 40 points.
The currency peaked overnight at US77.15c, recovering from Wednesday's six-week low below US76c.
"We've managed to take a bit of a breather after the week's events," said ANZ Investment Bank foreign exchange manager Murray Hindley. "We'll have to wait for non-farm payroll data tonight to see what the next move will be."
Global volatility on the back of US credit concerns have seen the kiwi slip from a post-float high around US81c last week.
"If we continue to see the subprime and equity markets continue to sell off there's chance of further weakness, but after the moves this week it probably needs some sort of consolidation," Mr Hindley said.
Against the Aussie, the kiwi firmed to A89.56c from A89.45c at 5pm yesterday, while the trade weighted index rose to 73.60 from 73.17.
Markets were taking a breather from the recent unwinding of carry trades, which resulted in a sell-off of high-yielding currencies such as the NZ dollar and a boost for the Japanese yen.
Today, the US dollar held above a four-month low against the yen ahead of the US payrolls report due later.
The euro held its gains against the US dollar and the yen after the European Central Bank held interest rates at 4 per cent, but hinted at a possible rate hike in September.
Analysts said investors were returning cautiously to selling low-yielding currencies such as the yen to buy higher-yielding but risky assets, as officials pointed out that problems in the subprime mortgage market were not affecting the overall economy.
Reuters currency rates:
5.15m today 5pm yesterday
NZ dlr/US dlr US76.80c US76.23c
NZ dlr/Aust dlr A89.56c A89.45c
NZ dlr/euro 0.5604 0.5579
NZ dlr/yen 91.51 90.43
NZ dlr/stg 37.72p 37.52p
NZ TWI 73.60 73.17
Australian dollar US85.75c US85.19c
Euro/US dollar 1.3705 1.3663
US dollar/yen 119.19 118.68
- NZPA
