Monday 2nd May 2011 1 Comment
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The New Zealand dollar had a volatile session but ended slightly below where it started.
Dealers said factors on the day included volatile commodity prices and news of the death of terrorist Osama bin Laden.
The direction of the US dollar remains a major factor in the market but locals are also waiting for the Reserve Bank of Australia interest rate decision tomorrow. It is expected to hold its benchmark rate at 4.75%.
The NZ dollar was at US80.62c at 5pm from US80.94c at 8am and US80.08c at 5pm on Friday. It briefly topped US81c to reach a new three-year high on Saturday.
Dealers said the NZ dollar came under pressure when the silver market plunged in early Asian trading today, sparking concerns about commodity prices.
The Australian dollar recovered from a sharp fall in response the silver price to rise past US$1.1000 for the first time since 1982. It was at US$1.0939 by 5pm from US$1.0898 at the same time on Friday.
The NZ dollar was at A73.63c at 5pm from A73.46c at the same time on Friday.
Dealers said the New Zealand and Australian dollars were initially higher on news of the death of bin Laden but the US dollar also gained some support.
The NZ dollar has been strong against a weak US dollar. The US dollar hit a three-year low against a basket of major currencies at the weekend, as the Federal Reserve keeps short term interest rates near zero.
Westpac said the convincing break above US80c for the NZ dollar pointed to a test of the post-float high US82.15c during the next week or two. The NZ dollar is fairly vaued around US80.50c.
"New Zealand interest rates are range-bound after last week's Reserve Bank of New Zealand meeting, but so too are US rates, so that global risk and US dollar direction are likely to be the key influences this week," Westpac said.
The NZ dollar was at 0.5447 euro at 5pm from 0.5400 on Friday and at 65.66 yen from 65.31 yen. The trade weighted index was 68.61 from 68.15.
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