NZ dollar in tight ranges as US on holiday

Tuesday 5th July 2011

The New Zealand dollar traded in relatively tight ranges overnight, with markets in the United States closed for the Independence Day holiday.

The kiwi remained at high levels against the US dollar, largely in a range between US83.05c and US82.70c, after last week reaching a post-float high around US83.20c. At 8am today the kiwi was buying US82.93c.

ANZ said the absence of the US market had left many investors devoid of the desire to break new ground or move things from recent elevated levels. Currencies had traded in extremely narrow ranges during the past 24 hours.

The inability of the NZ dollar to break new ground may provide some hope for those looking to buy on dips, ANZ said.

Against the Australian dollar, the kiwi moved in a range between A77.40c and A77.05c, after yesterday afternoon's surge from around A76.80c. The rise was attributed partly to disappointing Australian data, including a fall in retail sales and building consents.

ANZ said that while some people were hoping the Reserve Bank of Australia would cut interest rates at its review today, that was unlikely. But the talk around the announcement may help clarify direction in the short term.

A break toward A78c on any weakness from the RBA should cap NZ dollar strength.

The NZ dollar was buying 0.5706 euro at 8am, little changed from its level at 5pm yesterday, and was little changed at 67 yen. The trade weighted index also showed little movement to be at 71.26 at 8am.

NZPA

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