The New Zealand dollar closed little changed today despite spiking higher after Reserve Bank Governor Alan Bollard left interest rates unchanged.
"The kiwi had a small but aggressive short-lived knee-jerk reaction," ANZ Investment Bank senior dealer Mark Elliot said.
"It was around US67.90c before the announcement and spiked up to
US68.23c, and we've been trading in a tight range," he said.
The kiwi closed at US67.96c this evening from US68.05c at 8.30am and US68.07c at 5pm yesterday, having traded in a US67.80c to US68.27c range.
As expected, Dr Bollard left the official cash rate unchanged at 6.75 per cent in his six weekly review of rates.
However, he said there was no prospect for easing monetary policy in the foreseeable future.
He said inflation pressures remained strong and a firm monetary policy stance was needed. He expected inflation to push temporarily above the 1-3 per cent target band.
"Once the (Reserve Bank) announcement was out of the way, the trading was more dominated by the way the US dollar moved against other currencies, particularly against the aussie," Mr Elliot said.
On its crosses, the kiwi was buying A89.91c (A90.12c), 0.5631 euro (0.5670), 38.99 British pence (39.20), 0.8805 Swiss francs (0.8862) and 76.41 yen (76.74).
The TWI was at 69.02 (69.27) and the monetary conditions index was on plus 951 (969).
On the money market, 90-day bank bill yields were unchanged at 7.03 per cent, July 2009 bond yields were at 5.79 per cent (5.81), and April 2015s were at 5.77 per cent (5.78).
The Australian dollar was buying US75.59c (US75.54c at 5pm yesterday) while the euro was at US$1.2070 (US$1.2008) and the US dollar was trading at 112.43 yen (112.74).
- NZPA
