The kiwi was also weighed when business confidence fell to a net zero reading with as many pessimists as optimists. According to the ANZ Business Outlook survey, the September result is down from a net 18.3 per cent of firms that expected general business conditions to improve over the coming year in August.
"It was a terrible number. On every measure, that was weak," said Kelleher. The kiwi also eased when the country had a trade deficit of $1.235 billion in August versus the $825 million median forecast in a Bloomberg survey of 10 economists.
Against that backdrop as well as a stronger greenback, Kelleher said it was surprising the kiwi hasn't fallen further. He said he was hearing talk of an option structure expiry at around 73 US cents that might be limiting some of the downside. While he had no details, he said the client would likely be selling above 73.50 US cents and buying back at around 72.50 US cents and it would likely be a reasonably sized position.
Looking ahead, markets will be waiting for a raft of US Federal Reserve speakers with the main focus on a speech by Fed Chair Janet Yellen on "Inflation, Uncertainty, and Monetary Policy" later in the global trading day.
The kiwi traded at 61.08 euro cents from 60.80 cents late yesterday. It fell to 80.78 yen from 81.40 yen. The kiwi gained to 53.73 British pence from 53.62 pence, was at 91.17 Australian cents from 91.19 cents and at 4.7926 Chinese yuan from 4.7891 yuan.
The two-year swap rate fell 3 basis points to 2.17 per cent and 10-year swaps were down 4 basis points to 3.16 per cent.
