KEY POINTS:
The New Zealand dollar continued to fall against the greenback today after weak overnight trading as the market awaits tomorrow's official cash rate announcement.
The New Zealand dollar was down to US75.56c at 4.30pm today from US76.13c yesterday.
Earlier, the US dollar was boosted by a steep drop in oil prices and comments from US Treasury Secretary Henry Paulson that a strong US dollar was in the interests of the nation.
Westpac head of financial markets Lloyd Cartwright said the New Zealand market was "essentially on hold" ahead of the Reserve Bank decision due at 9am tomorrow.
"The kiwi is marginally weaker on the day and I think some of that is rising anticipation around tomorrow's statement and the possibility of a rate cut. The market's pricing it at about a 50-50 chance but I think maybe the currency market might be positioning a little more aggressively than that."
Against the Australian dollar, the kiwi was at A77.99c at 4.30pm today from A78.17c at 8am and A77.92c yesterday afternoon.
Mr Cartwright confirmed the kiwi had "not significantly changed" against the Australian dollar today.
The trade weighted index closed on 67.13 against 67.25 last night.
The US dollar stayed firm today holding much of its recently gained ground as the Australian dollar rose briefly against the greenback on numbers showing Australian inflation accelerating to its fastest annual pace in almost 17 years during the second quarter.
CPI rose 1.5 per cent from the previous quarter and 4.5 per cent year-on-year, but both numbers were as expected by the Reserve Bank of Australia and did not add to expectations of yet another rate hike, analysts said.
The Aussie briefly hit US97.36c during the day but was down to US96.90c at 4.30pm local time.
Reuters currency rates:
NZ dlr/US dlr US75.56c US76.13c
NZ dlr/Aust dlr A77.99c A77.92c
NZ dlr/euro 0.4785 0.4779
NZ dlr/yen 81.09 80.93
NZ dlr/stg 37.91p 38.00p
NZ TWI 67.13 67.25
Australian dollar US96.90c US97.63c
Euro/US dollar 1.5790 1.5925
US dollar/yen 107.28 106.42
- NZPA
