NZ dollar falls vs greenback, yen

The New Zealand dollar consolidated at lower levels today after the United States Securities and Exchange Commission charged leading investment bank Goldman Sachs with fraud, prompting investors to seek refuge in the safe haven currencies.

The NZ dollar was US70.86c at 5pm from US70.76c at 8am and US71.07c at 5pm on Friday.

After the Goldman Sachs news broke on Saturday NZ time, the NZ dollar fell from around US71.25c to around US70.65c within an hour.

Attention is also now turning to Consumer Price Index data for the March quarter due in New Zealand tomorrow.

TD Securities speculated that a "cat is about to pounce on the doves" who expect interest rates to remain low for a long time in New Zealand.

"Tomorrow we expect a nasty upside surprise to March quarter inflation, especially when compared with the Reserve Bank of New Zealand (RBNZ) forecast."

TD Securities expects a 0.9 per cent rise in the quarter to an annual rate of 2.6 per cent, which is in the top half of the RBNZ's 1 to 3 per cent target range. The market consensus is for a 0.6 per cent quarterly rise.

Westpac said the CPI was arguably the most important piece of information for the RBNZ ahead of their April 20 review of the official cash rate. Westpac predicts a 0.7 per cent rise, which it said would "seal the deal" for a rise in the official cash rate in June and be positive for the NZ dollar.

Westpac said last week saw a confluence of risk-averse factors causing so-called safe haven currencies to outperform.

By 5pm the NZ dollar was 65.21 yen from 65.90 yen at Friday's local close.

It was at 0.5260 euro from 0.5252 euro and at A77.04c from A76.45c.

The trade weighted index was at 65.75 at 5pm from 65.74 on Friday.

- NZPA