Kiwi hits 5-month high against greenback before sliding back

Tuesday 12th April 2011

After reaching a five-month high around US78.45c against the greenback yesterday evening, the New Zealand dollar fell away quickly early today to be hovering under US78c at the local market open.

BNZ currency strategist Mike Jones said the US dollar firmed modestly overnight, as reports of another large aftershock in Japan knocked back risk appetite a touch and encouraged demand for safe haven currencies such as the greenback and yen.

Along with the firmer US dollar, a bout of profit-taking by speculative accounts long on the euro, and Australian and NZ dollars added to downward pressure on the kiwi against the US currency.

At 8am the NZ dollar was buying US77.92c, down from US78.31c at 5pm yesterday. The kiwi was also down to 65.93 yen from 66.35 at 5pm, while edging up to A74.29c against the aussie from A74.06c.

ANZ said the NZ dollar could test the downside of recent ranges after failing to break through resistance at US78.50c overnight.

With little economic data to move things around for now, markets must look into the future, with first quarter inflation figures due on Monday likely to draw much attention from offshore participants, ANZ said.

The NZ dollar also edged lower to 0.5400 euro at 8am from 0.5414 at 5pm, while the trade weighted index fell to 67.80 from 68.02.

NZPA

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