The New Zealand dollar remained tucked in a tight range yesterday although it managed to outperform the Australian dollar.
At 5pm the kiwi traded at US46.55c, slightly higher than Wednesday's close of US46.52c. The aussie was at US54.35c, down on Wednesday's close of US54.40c.
Bank of New Zealand currency dealer Mark Elworthy
said the kiwi was well supported at US46.40c, and was being sold off at US46.80c.
"I don't expect it to run anywhere on either side," Mr Elworthy said.
"The kiwi's performed very well against the aussie ... basically it's got to quite an important level overnight, that $NZ1.1700.
At 5pm the aussie was trading at $NZ1.1677 ($NZ1.1697).
"There have been good sellers of aussie, and buyers of kiwi ..."
The Australian dollar has fallen to its lowest levels against the US dollar in over a week as dimming global growth prospects dented the appeal of commodity-linked currencies.
Mr Elworthy said that investors were likely to buy the kiwi if it dipped in the next little while, but the focus was likely to remain on the aussie.
"The other thing is if US equity markets continue to weaken, I'd think we're going to see a bit of downside on the aussie and kiwi, from the risk reversal point of view."
In offshore trade, the US dollar saw little movement in Asia amid uncertainty over the global economy and financial markets that left most dealers at a loss which way to bet.
Greenback sentiment remained shaky despite a 1.4 per cent rise in the Dow Jones industrial average on Wednesday after five consecutive losing sessions, dealers said.
On the crosses, the kiwi traded at A85.64c (A85.52 at Wednesday's close), 54.82 yen (54.59), 29.71 pence (29.74), 0.6847 Swiss francs (0.6836), and 0.4682 euro (0.4670).
On the money market, 90-day bills were at 5.86 per cent (5.87), the trade-weighted index was at 52.96 (52.86) and the monetary conditions index was at minus 490 (minus 499).
The April 2004 bonds were at 5.55 per cent (5.56), the November 2006 bonds were at 5.89 per cent (5.90), and the November 2011 bonds were at 6.10 per cent (6.12).
- NZPA
