The New Zealand dollar drifted off its recent highs today and looked unlikely to return above the US44c level until later this week.
At 5pm the kiwi dropped to US43.91c from Friday's close of US44.06c, while the aussie was at US53.13c from US53.55c on Friday.
The kiwi looked set to consolidate below its weekend high of US44.50c, one local dealer said.
The kiwi's range during the day was US44.25c/US43.83c on pretty light flows.
"It just really mirrored movements in the aussie, the aussie's come off its highs as well. Fairly quiet day despite the range - I think the range overstates the amount of activity that's gone on," he said.
The greenback made substantial gains today to recover from recent five-month lows against the euro, eking out its first weekly gains since early July with the help of firmer US stocks and amazingly resilient US consumers.
"The US dollar has made some gains across the board, so I think that it's difficult for the kiwi to move higher against a backdrop of a higher US dollar," he said.
He expected the kiwi to trade between US43.75/95c, and likely to see US44c later in the week.
Today's trade balance today was pretty much on market expectations, he said.
New Zealand posted a $46 million deficit in July but for the July year registered a $65 million surplus - the first since April 1995, according to Statistics New Zealand.
Across the Tasman, Australian current account data is due out on Wednesday.
The euro faces a key test in the European Central Bank's meeting this week, after closing the week within nearly a cent of Wednesday's high.
Analysts expect the euro to consolidate lower after a six-week run-up of nearly 10 percent against the dollar, but expectations of a growth-boosting European rate cut next week have supported the single currency.
The ECB, wary of relatively high European inflation, has only cut rates once this year. In a survey conducted by Reuters this week, 41 out of 55 economists predicted the ECB would cut interest rates by a quarter point to 4.25 percent next Thursday.
The euro closed in New Zealand at US91.12c from Friday's close of US91.64c.
BNZ currency strategist Stuart Ritson said today the market was on the lookout for currency implications of Allied Domecq's $1 billion purchase of Montana Group, where Lion Nathan on Friday agreed to sell its 43 percent stake.
He also said there was evidence the eurokiwi market was emerging from a long hibernation.
Britain markets are closed for summer bank holiday on Monday.
On the crosses at 5pm, the kiwi was at A82.62c (A82.60c at Friday's close), 52.75 yen (52.97), 30.46 pence (30.55), 0.9424 marks (0.9448), 0.7322 Swiss francs (0.7333), and 0.4819 euros (0.4828).
The aussie was buying $NZ1.2100 from $NZ1.2116 on Friday.
The trade-weighted index was at 51.61 (51.81), 90-day bills were steady at 5.86 percent and the monetary conditions index loosened to minus 618 (minus 599).
On the bond market, the March 2002s were at 5.73 percent (5.76), the April 2004s were at 6.21 percent (6.25), the November 2006s were at 6.41 percent (6.44), and the November 2011s were at 6.57 percent (6.59).
- NZPA
<i>Currency:</i> Kiwi consolidates below US44c
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