The New Zealand dollar fell to a seven year low against the Australian dollar today after the Reserve Bank yesterday signalled it would shortly begin an easing cycle.
Against the US dollar, the kiwi picked up a little following yesterday's hammering. It ended the session on US76.74c from
US76.57c at 5pm yesterday but was nearly US1.25c below where it was before the RB statement that it could cut interest rates by the end of the year.
The kiwi ended on A79.84c against the Australian dollar. That was a drop from A80.32c at yesterday's close.
ANZ chief dealer Murray Hindley said the kiwi had consolidated against the US dollar as it needed to. Direction would be determined by crucial jobs data in the US tomorrow.
In New Zealand, next Friday's retail sales data should confirm how weak the economy is.
Mr Hindley said rallies above US77.10c would be sold and for the moment the kiwi had support at US76.20c.
Bank of New Zealand currency strategist Danica Hampton said a wide range of accounts had shown an active interest in selling the NZ dollar in the past 24 hours.
The euro was bought on comments by European Central Bank president Jean-Claude Trichet that euro-zone interest rates could rise as early as next month.
Speaking after the ECB left rates unchanged at 4.0 per cent, Mr Trichet said it was possible the bank could raise rates in July, which would increase the attractiveness of euro zone assets and the currency.
Some analysts called Mr Trichet's comments a "shocker" and said it could set the stage for the euro to push back towards the record US$1.6020 hit in April, especially if the US jobs report later in the day shows any unexpected weakness.
The dollar had bounced back after Federal Reserve Chairman Ben Bernanke surprised investors himself by making unusually explicit remarks that a weaker dollar was leading to inflation risks and inflation expectations were a significant concern.
Currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US76.74c US76.57c
NZ dlr/Aust dlr A79.84c A80.32c
NZ dlr/euro 0.4926 0.4971
NZ dlr/yen 81.42 80.84
NZ dlr/stg 39.17p 39.25p
NZ TWI 68.50 68.62
Australian dollar US95.97c US95.36c
Euro/US dollar 1.5581 1.5402
US dollar/yen 106.08 105.55
- NZPA
