The New Zealand dollar hitched a ride with its Australian counterpart after Standard & Poor's raised Australia's credit rating today.
Both currencies bounced about 20 points after S&P boosted its rating on Australia's foreign currency to AAA from AA+ with a stable outlook.
The kiwi traded today between US55.02c and US55.25c.
ANZ Investment Bank senior dealer Mark Elliott said the kiwi continued to struggle around US55.25/30c, despite having passed that level to reach a four-year high of US55.60c on Friday.
"The US55.25/30c level has been a big resistance level for a couple of weeks. We kicked that on Friday but a failure to hold that makes me a bit nervous that the market's positioned a bit too long," Mr Elliott said.
"There may be further room for profit-taking and liquidation."
At 5pm the kiwi had retreated to US55.09c from Friday's close of US55.42c, while the aussie was at US59.18c, not far from its Friday close of US59.16c.
Friday's dovish report from chief UN arms inspector Hans Blix pushed the imminent likelihood of war back, pushing the euro to $US1.0720 from its Friday level of $US1.0830. The US dollar was buying 120.57 yen (120.59).
On the crosses at 5pm the kiwi was buying A93.10c (A93.13c on Friday), 0.5139 euro (0.5117), 66.42 yen (66.83), 34.31 pence (34.16) and 0.7570 Swiss francs (0.7514).
The aussie was buying $NZ1.0741 ($NZ1.0736)
The trade-weighted index was at 61.95 (61.07), 90-day bills were unchanged at 5.84 per cent, and the monetary conditions index was at plus 211 (plus 221).
On the bond market long-dated New Zealand bonds fell sharply, with April 2004 government bonds at 5.50 per cent (5.47), the November 2006s at 5.47 per cent (5.44), the November 2011s at 5.92 per cent (5.86), and the April 2013s at 5.95 per cent (5.79).
- NZPA
<i>Currency:</i> Dollar retreats from last week's highs
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