The New Zealand dollar held firm today after a turbulent night when it hit a new five-month high of US43.70c and was then sold off sharply with the euro.
It closed slightly down at US43.20c from its US43.27c opening and well down on yesterday's US43.58c close.
The kiwi hovered in a US43.20/40c range during the day.
BNZ foreign exchange manager Greg Ball said the kiwi was being driven purely by the gyrations of the US dollar and the euro and there had been mixed signals from Europe and the States that batted those two currencies to and fro.
The kiwi selldown was in tandem with the euro when the Bundesbank posted a report to say the German economy was stagnating.
But both the kiwi and euro revived after the Federal Reserve Bank of Philadelphia reported that activity in the US mid-Atlantic was far worse than expected.
Mr Ball described the "Philly Fed" report on the key US manufacturing belt as "atrocious".
He said the BNZ believes the kiwi will continue to ascend as long as an important support level at US42.80c is not breached. The kiwi had been over-bought and it had needed a sell-off before the uptrend could continue, he added.
Another dealer said the kiwi would not soar during the weekend but it would remain within the US43.10c/20c range overnight, and was likely to test US43.70c again before Monday.
The euro ended in Wellington at US91.23c compared with its local close US91.48c yesterday.
The Australian dollar was buying US52.50c compared with US52.86c yesterday.
ANZ Investment bank said that the balance of probabilities had swayed back towards the bulls in the medium-term, but in the short-term the kiwi's rally was close to completion.
On the crosses, the kiwi was buying A82.33c (against yesterday's close of A82.44c), 52.14 yen (52.26), 29.95 pence (30.24), 0.9264 marks (0.9317), 0.7190 swiss francs (0.7236), and 0.4736 euros (0.4747).
The aussie was buying $NZ1.2145 against yesterday's close of $NZ1.2129.
The trade-weighted index was at 50.91 (51.18), and with 90 day bills at 5.87 percent (5.87 percent) the monetary conditions index eased to minus 686 from minus 660 yesterday.
Bond yields fell with the March 2002s at 5.75 percent (5.75), the April 2004s were at 6.33 percent (6.36), the November 2006s were at 6.47 percent (6.50), and the November 2011s were at 6.63 percent (6.65).
- NZPA
<i>Currency:</i> Kiwi holds steady after selloff
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