The New Zealand dollar spent today's session consolidating ahead of key payrolls data out of the United States and despite comments by Finance Minister Michael Cullen.
At 5pm, the kiwi was fetching US66.78c (from US66.98c at the same time last night), having traded between US66.58c and USA66.83c.
The Australian dollar was at US75.03c (US75.05c).
BNZ currency strategist Sue Trinh said commodity currencies like the kiwi and aussie were quiet ahead of the payrolls data, out at 2.30am tomorrow (Sat).
"The market is lying in wait for that and it is pretty much in a holding pattern," Ms Trinh told NZPA today.
"Clearly if the numbers do support that the US Federal Reserve can hike rates sooner rather than later, then US dollars will extend its lift and see the kiwi under further pressure."
The Federal Reserve's benchmark interest rate is currently at 1 per cent, a 45-year low.
Market expectations of a high payrolls number were inflated and if it came in below predictions "you can probably expect the kiwi to go onwards and upwards".
Also today, Dr Cullen continued his verbal assault on the soaring kiwi, which has gained 19 per cent against the greenback in the past year.
He said the kiwi was still overvalued and may damage New Zealand's export industries.
"I believe the New Zealand dollar is currently over-valued given the strength of the New Zealand economy relative to our major trading partners, especially Australia, and given the rising current account deficit," he said in a statement today.
Market watchers were also looking ahead to the Reserve Bank of New Zealand's monetary policy statement on March 11, when it was expected to lift the official cash rate (OCR) 25 basis points to 5.50 per cent.
Last night, the European Central Bank (ECB) left euro zone interest rates unchanged at 2 per cent, while, on Wednesday, the Reserve Bank of Australia held its OCR at 5.25 per cent.
ECB president Jean-Claude Trichet said that bank's OCR was appropriate and the economic risks were balanced, despite both Germany and France pushing for a cut.
The euro was at US$1.2201 (US$1.2170), while the greenback was fetching 111.33 yen (110.16).
On the crosses, the kiwi was fetching A89.01c (89.26), 0.5474 euro (0.5505) 74.35 yen (73.78), 36.65 British pence (36.66) and 0.8634 Swiss Francs (0.8690).
The trade-weighted index fell to 67.32 (67.42), while the monetary conditions index was at plus 689 (697).
The 90-day bank bill yields were unchanged at 5.66 per cent.
The February 2006 yields were at 5.61 per cent (5.58), July 2009 bonds were at 5.82 per cent (5.81), and the April 2013s were at 5.94 per cent (5.95).
- NZPA
AdvertisementAdvertise with NZME.
Latest from Business
Security company worker pilfers $466k, using his children as decoys, in years-long swindle
'You breached that fundamental trust they had in you.'