The New Zealand dollar held on to most of its gains against the greenback, after spiking to a 10-month high around US74.60c early on Saturday.At 5pm today the kiwi was buying 74.26USc, having eased against a broadly strengthening US dollar from 74.40USc a
The New Zealand dollar held on to most of its gains against the greenback, after spiking to a 10-month high around US74.60c early on Saturday.
At 5pm today the kiwi was buying 74.26USc, having eased against a broadly strengthening US dollar from 74.40USc at 8am.
The US dollar had been battered as expectations rise that the Federal Reserve is close to resuming quantitative easing to give a boost to the sluggish US economy.
The NZ dollar also managed to make up a little ground on the powerful Australian currency, lifting from 76.46Ac at 8am to 76.65Ac at 5pm.
Market expectations are favouring a lift in interest rates tomorrow by the Reserve Bank of Australia.
ANZ bank said that with the NZ dollar near 10-year lows against the aussie, little scope was left for further depreciation.
Broadly, the NZ dollar was being pushed around by external factors with little to focus on domestically, ANZ said.
Technically the NZ dollar was at a critical juncture. Key resistance at 74.40USc had been tested. A convincing break would see the next resistance at 75.25USc, and then 76.35USc, ANZ said.
"There have been a number of times during the past year when the NZD has looked set to break higher but failed. This time the prospect looks a little more certain, but 'handle with care'."
BNZ strategist Mike Jones expected stiff resistance should the kiwi push toward the November 2009 high of 75.20USc.
The NZ dollar against the greenback was starting to look overstretched on a fair-value basis, he said.
For the first time since last November the kiwi was above the fair-value range implied by BNZ's short term valued model of 72USc to 74USc.
The NZ dollar edged up to ¥62.09 at 5pm from ¥61.92 at 8am, and to €0.5400 from €0.5389.
The trade weighted index was 66.63 at 5pm, the same reading as at 8am.
