NZ Dollar remains sidelined in quiet trade

Thursday 13th January 2011

The New Zealand dollar was sidelined today, while the Australian dollar went on a roller coaster ride in reaction to employment data.

Dealers said the NZ dollar lagged overnight when other currencies rose against a weak US dollar and then it traded in a range today.

The NZ dollar was at US76.16c at 5pm from US76.23c at 8am and US75.92c at 5pm yesterday. The local currency spent most of the session between US76.00c and US76.40c.

"We are sidelined at the moment, and trapped in a range between US75.80c and US76.40c," one dealer said.

The local currency was at A76.57c at 5pm, little changed from A76.55c at 8am and down from A77.02c at 5pm yesterday. It peaked around A77.30c at lunchtime yesterday as markets worried about the impact of the Queensland floods on the Australian economy. It blipped higher to A76.87c today when the Australian dollar was weak but then eased.

"The Australian dollar is higher than it was yesterday and the kiwi is basically the same level," the dealer said.

The Australian dollar was at US99.41c from US98.54c yesterday. It dropped about half a US cent on news that Australian employment rose by a less than expected 2300 in December. But the jobless rate dropped to 5% and investors focused on that.

Concerns about the impact of the floods in Queensland on the Australian economy are reducing.

In New Zealand, Statistics New Zealand said seasonally adjusted electronic card transactions fell 1.2% in December from November. This was weak and ASB economists said the Reserve Bank of New Zealand may not raise the official cash rate until September.

Dealers said a New Zealand government bond tender today was well bid, which was positive. The tender was large, with $950 million of bonds sold.

The NZ dollar was at 0.5810 euro from 0.5838 euro yesterday and at 63.20 yen from 63.15 yen yesterday.

The trade weighted index was 68.85 at 5pm from 68.95 at the same time yesterday.

NZPA

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