The New Zealand dollar made little ground today against the US dollar and was stuck in narrow ranges against other key currencies.
By 5pm, the kiwi was worth US77.20c, virtually unchanged from this morning but up a touch from yesterday afternoon's US77.00c.
Against the Australian dollar, the kiwi was at
A76.11c compared with A75.94c at 5pm yesterday.
Rising prices for New Zealand commodities have bolstered NZD sentiment recently, BNZ currency strategist Mike Jones said.
"But with Australian commodity prices rising at a broadly similar rate to NZ prices, the NZD/AUD has not benefited to the same extent as other NZD crosses.
"The NZD/AUD fell back into line with `fair-value' last week. However, it is still sitting near the top of our `fair-value' range, suggesting the cross is not yet a `buy' from a fundamental perspective," Mr Jones said.
The biggest factor in the cross-rate's movement was what the two central banks were expected to do to interest rates, and the NZ dollar would struggle to hold onto gains above A78c in the near future.
The Reserve Bank of Australia is expected to lift its benchmark rate from 4.75 per cent as early as May this year, given the country's strong export earnings and robust economy.
In contrast, New Zealand's economy is softer and recent employment data has been surprisingly weak, further dampening the likelihood of an interest rate rise on this side of the Tasman any time soon.
By 5pm today, the kiwi eased to 0.5671 euro from 0.5685 euro this morning, but was up slightly from 0.5656 yesterday afternoon.
The NZ dollar was at 63.54 yen from 63.31 yen yesterday, and at 47.85 pence from 47.71p. The trade weighted index inched up to 68.54 from 68.41 yesterday.
The euro recovered somewhat from a two-week low against the US dollar, having slid after weak German data dented expectations of a European rate rise. The euro may see more support from Asian buyers returning from new year holidays.
- NZPA
