The New Zealand dollar consolidated in a relatively narrow range today as analysts continued to debate investor behaviour in the US dollar market.
At 5pm the NZ dollar was buying US67.35c, down from US67.59c at 8am and unchanged from 5pm yesterday. It traded between US67.30c and US67.70c today.
ANZ said
the NZ dollar appeared to have landed in a sea of tranquillity as other currencies tumbled against it in overnight trading.
"The NZ dollar appears to be waiting for the next bus and unsure of which one to catch."
Analysts continue to comment on the rise in the US dollar on better than expected data on Friday. Previously the US dollar had risen on weak data on the argument the currency is a safe haven.
"While it may be too early to tell, the onus will be on whether the US dollar can hold the bid seen on Friday. If it can we may see a breakout point at US66c in the NZ dollar," Westpac said in its weekly foreign exchange outlook report.
"Sentiment towards the US dollar remains the dominant driver of risk currencies," Westpac said.
While a stronger US dollar is a risk for the NZ dollar, Westpac said the NZ dollar's move from US66c to US67c was supported by fundamentals like stabilising dairy prices.
The NZ dollar was buying A80.85c by 5pm from A80.15c yesterday.
It was at 0.4768 euro from 0.4735 and 65.16 yen from 65.40. The trade weighted index rose to 63.09 from 62.82 at 5pm.
- NZPA
