The New Zealand dollar was stuck in a holding pattern yesterday as investors forsook the currency in favour of the euro.
The kiwi traded in a tight 18-point range but by 5pm had reverted back to opening levels at US48.15c, compared with US48.42c at Wednesday's local close. The Australian dollar wasat US55.20c (compared to US55.61).
Dealers said there was good support for the New Zealand currency "just under the figure" of US48c but it was struggling for momentum. It had followed the aussie closely which had also lost some steam.
"The kiwi and aussie dollars went up very quickly -- I think it's just catch-up for the euro," said a local dealer.
Having gained parity with the soggy US dollar, the euro closed here at 1.009, virtually static with yesterday's close (1.012). But its rapid rise had convinced dealers there was more upside to come, and more bad news out of the United States.
BNZ strategist Stu Ritson said the kiwi dollar's heaviness suggested it could move lower towards a key trendline of US47.25c that extended back to February this year.
A key support level was US47.80c, one dealer said. He expected the kiwi to travel between US47.95c/US48.30c overnight.
On the crosses at 5pm the kiwi traded at A87.24c (A87.06c at Wednesday's close), 56.02 yen (56.15), 30.69 pence (30.75), 0.6997 Swiss francs (0.7014) and 0.4772 euro (0.4786).
Against the kiwi, the aussie was buying $NZ1.1463 ($NZ1.1486).
On the money market, 90-day bills were steady at 6.04 per cent, the trade-weighted index was at 54.32 (54.46) and the monetary conditions index was at minus 345 (minus 333).
On the debt market, the April 2004 bonds were at 5.81 per cent (5.86), the November 2006 bonds were at 6.32 per cent (6.22), and the November 2011 bonds were at 6.59 per cent (6.56).
