The New Zealand dollar's rally to record levels stalled today and the local currency fell sharply against a rising Australian dollar.
The NZ dollar, which has been trading at post-float highs, was at US82.25c at 5pm, down from US82.46c at 8am. It fell sharply to A76.53c at 5pm from A77.30c
at 8am and A76.94c at 5pm yesterday.
"Kiwi moved up a bit and then got sold off aggressively. It seemed that a lot of people were getting out of long kiwi and short aussie positions and that caused the cross to move quite dramatically," one dealer said.
"Kiwi was probably not in fashion today," he said.
The Australian dollar rose to US$1.0745 at 5pm from US$1.0716 at the same time yesterday.
Investors contemplated news that Australia's economy shrank 1.2 per cent in the first quarter, its biggest decline in 20 years, but there was relief that it was not as bad as some people were expecting.
Extensive flooding reduced coal exports, but the mining boom is expected to help growth bounce back this year.
Annual growth in gross domestic product slowed to 1 per cent in the quarter, down sharply from 2.7 per cent in the fourth quarter of 2010, data showed on Wednesday.
Dealers noted that the NZ dollar popped over 50.00p on Tuesday night but eased to be 49.93p at 5pm today.
It was at 66.82 yen from 66.98 yen yesterday and at 0.5698 euro from 0.5733 euro yesterday.
The trade weighted index was at 70.77 at 5pm from 71.01 at the same time yesterday.
The euro has been around a three-week high against the US dollar on the belief that Greece may avoid a debt restructuring
- NZPA
