The New Zealand dollar was little changed as the greenback lost some of its lustre in the Asian trading session, having touched a six-month low on a dip in dairy prices.
The kiwi dollar traded at 69.34 US cents as at 5pm in Wellington from 69.30 cents late Tuesday aftertouching an overnight low of 68.80 cents as dairy prices fell.
It was the first time in four auctions that prices fell on the GlobalDairyTrade platform overnight, with whole milk powder down 0.8 per cent to US$3,568 a tonne. However, it swiftly pared some of those losses as the greenback lost some momentum in Asia.
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"A slight pullback in the US dollar gave the kiwi a bit of life on the day," said Westpac Banking Corp senior FX strategist Imre Speizer. The greenback "ran too far, too fast" and the market is consolidating a bit. The US dollar got a strong lift after the US Federal Reserve lifted interest rates last week and signalled more to come.
The trade-weighted index rose to 77.29 from 77.21 yesterday.
Westpac's Speizer said the kiwi largely overlooked news that New Zealand's monthly trade deficit narrowed less than expected in November but said Thursday's gross domestic product data may garner more interest. Thin pre-Christmas trading could also exacerbate any moves. Economists are expecting the economy to have grown 0.9 per cent in the third quarter, bringing annual growth to 3.7 per cent, bolstered by the service and construction sectors.
"It's quite a closely watched indicator," said Speizer.
The local currency traded at 95.55 Australian cents from 95.45 cents late Tuesday. It was at 4.8177 yuan versus 4.8166 yuan and was at 81.58 yen from 81.25 yen. It traded at 66.59 euro cents from 66.54 cents and was little changed at 56 British pence versus 55.85 pence.
New Zealand's two-year swap rate rose three basis points to 2.41 per cent, and 10-year swaps were down one basis point to 3.54.
