Currency: Dollar little changed

Better than expected economic figures gave the New Zealand dollar a boost today, but any gains were quickly eroded.

At 5pm today it was worth US57.57c, little changed from US57.53c at 5pm yesterday.

It capped a week that saw the kiwi start at US55.82c on Monday, reach a low of US55.47c and a high of US58c, which was its highest against the US dollar in more than 10 weeks.

Today saw the announcement of a February trade surplus of $489 million, or 14.2 per cent of exports. The median prediction of economists in a Reuters poll was for a surplus of $219m.

The currency market was expecting an awful number but it wasn't quite that awful after all, said Westpac senior market strategist Imre Speizer.

"It probably pushed up the kiwi by about 30 pips. But having said that it's clawed it all back and then some. So it's essentially back to where it was early this morning at about US57.5c."

Often the end of the quarter saw a rally in risk assets which could possibly push up the kiwi for another leg over the next few days, he said, but after that it would probably come back down again.

Mr Speizer said interest rate markets didn't usually outdo the currency for volatility, but they did for the last two days as a number of banks raised their longer term mortgage rates.

That had tightened monetary conditions in the economy just when it did not need it, which would put the pressure on the Reserve Bank to think about what it could do to alleviate that, he said.

Meanwhile, the kiwi was little changed against other currencies today, down to A82.19c at 5pm today from A82.30c yesterday against the Australian dollar.

Against the euro it was up to 0.4244 euro today from 0.4240.

It climbed as high as 57.14 yen, its highest since November 11, on the Reuters dealing system, before retreating to 56.60 at 5pm from 56.24 yesterday.

It also gained against the British pound to 39.75p from 39.44p.

The trade weighted index rose to 57.15 from 57.07.

The Japanese yen rose against the US dollar on Friday, recovering some losses made the previous day, as a major Japanese investor repatriated funds from overseas ahead of the business-year end this month.

The yen had fallen against major currencies the previous day and hit a near five-month low versus the New Zealand dollar earlier in Asian trade, as investors grew more comfortable about buying risky assets including higher-yielding currencies.

The US dollar fell 0.2 per cent from late US trade on Thursday to 98.55 yen.

Reuters currency rates:

5pm today 5pm yesterday

NZ dlr/US dlr US57.57c US57.53c

NZ dlr/Aust dlr A82.19c A82.30c

NZ dlr/euro 0.4244 0.4240

NZ dlr/yen 56.60 56.24

NZ dlr/stg 39.75p 39.44p

NZ TWI 57.15 57.07

Aust dlr/US dl 70.05c 69.86c

Euro/US dlr 1.3567 1.3568

US dlr/yen 98.34 97.78

- NZPA