Tuesday 1st March 2011
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The New Zealand dollar held above US75c overnight against the greenback, which fell to a 3-1/2-month low against major currencies on speculation Federal Reserve Chairman Ben Bernanke will continue to support stimulative policy.
At 8am today the kiwi was buying US75.17c from US75.07c at 5pm yesterday.
BNZ currency strategist Mike Jones said local markets had shrugged off yesterday's generally upbeat New Zealand terms of trade and business confidence data.
That was perhaps not surprising, given the data in both preceded the Christchurch earthquake a week ago, but they also provided a clear residual message that New Zealand had been building up a considerable head of steam before the catastrophe, Jones said.
Overnight, the NZ dollar had done the "sideways shuffle" against the US dollar, torn between positives from improving global risk appetite, and the negative influence of fading yield support.
The dramatic decline in NZ-US interest rate differentials in the wake of the earthquake suggested room for the NZ dollar to fall further, Jones said.
The NZ dollar was little changed against the Australian dollar at A73.93c, having fallen to a decade low around A73.65c on the weekend.
Against the European currency, the kiwi eased to 0.5453 euro at 8am from 0.5462 at 5pm, while lifting to 61.52 yen from 61.31. The trade weighted index fell to 66.39 from 66.45.
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