Dollar consolidates recent gains

The New Zealand dollar traded in a narrow range today after rising in response to a rise in official Australian interest rates yesterday and higher commodity prices.

By 5pm, the NZ dollar was buying US72.74c from US72.82c at 8am, which was around its highest level in nearly a week. It was US71.80c at 5pm yesterday.

ANZ chief foreign exchange dealer Murray Hindley said the NZ dollar traded in a narrow range between US72.54c and US72.82c today.

There was little reaction in currency markets to the failure of carbon trading laws to get through the Australian parliament, raising speculation of an election before the Government's full term.

Investors have become more comfortable with investing in higher yielding currencies again with commodity and share markets firming.

"It has been a pretty quiet day today. Technicals suggest another move back to US73.30c but it is largely dependent on global equity markets," Mr Hindley said.

Worries about Dubai's debt problems have subsided.

The yen has weakened broadly after the Bank of Japan announced more monetary easing measures to fight deflation and help the ailing economy, while holding interest rates.

At today's local close the NZ dollar was buying 63.31 yen from 61.59 at 5pm yesterday. The NZ dollar was also up to 0.4819 euro at 5pm from 0.4782 at the local close.

Against the Australian dollar, the NZ dollar topped A78.90c earlier this week but was A78.45c by 5pm.

The trade weighted index lifted to 64.40 from 63.88 yesterday.

- NZPA