KEY POINTS:
The New Zealand dollar paused today after it spiked up overnight against a depressed greenback.
The kiwi closed on US70.65c, just above its opening but over a cent higher than yesterday's US69.53c close.
The US dollar slumped to a 15-year low against a basket of major currencies for
the third straight trading session on expectations of a US interest rate.
The kiwi also rose against the currencies of other major trading partners, particularly the Australian dollar.
ANZ said a recovery in US equity markets had contributed to the kiwi's rise as did stop-loss buying.
It said yield differentials were returning to the driving seat, although strong headwinds should develop above US71c as profit taking set in.
Few analysts expect the Reserve Bank to hike interest rates for the fifth time this year tomorrow although the bank might lift its inflation forecast so it projects a fresh breach of the 1-3 per cent target band.
As usual, the analysts are hanging out for the text and the tone of the statement rather than the actual decision.
The kiwi closed on A84.55c against the Australian dollar compared with A83.95c yesterday and the trade weighted index ended on 67.38 from 66.46.
The US dollar recovered against the yen after Japanese media reported Prime Minister Shinzo Abe had said he would resign.
Abe's ruling Liberal Democratic Party suffered an election drubbing in July and his support ratings have been floundering amid a row over pensions and a series of financial scandals involving cabinet ministers.
The US dollar hovered near a record low against the euro, hampered by expectations that the Federal Reserve would start cutting interest rates next week to counter the US economy's slowdown.
The dollar has come under pressure after data last week showed US payrolls shrank for the first time in four years in August, cementing expectations for the Fed to cut interest rates by at least a quarter-percentage point on September 18.
Reuters currency rates:
5pm today 5pm yesterday:
NZ dlr/US dlr US70.65c 2US69.53c
NZ dlr/Aust dlr A84.55 A83.95c
NZ dlr/euro 0.5102 0.5038
NZ dlr/yen 80.68 79.09
NZ dlr/stg 34.75p 34.29p
NZ TWI 67.38 66.46
Australian dollar US83.50c US82.86c
Euro/US dollar 1.3841 1.3798
US dollar/yen 114.28 113.76
- NZPA