The New Zealand dollar recovered today from a fortnight low against the US dollar, rebounding above the key 66USc level by the end of domestic trading.By 5pm, the kiwi was at 66.34USc, 2USc below its level before Queen's Birthday weekend, but above the da
The New Zealand dollar recovered today from a fortnight low against the US dollar, rebounding above the key 66USc level by the end of domestic trading.
By 5pm, the kiwi was at 66.34USc, 2USc below its level before Queen's Birthday weekend, but above the day's low of 65.72USc.
Against the aussie, the kiwi rose to 81.05Ac from 80.99Ac before the weekend, but was a touch below its level this morning.
The key to the kiwi's performance this week will be the Reserve Bank's decision on interest rates on Thursday.
The bank is expected to hike by 25 points to 2.75% to combat looming inflationary pressures amid a domestic economic recovery, and before a rise in the GST rate and introduction of the emissions trading scheme, which will also put up prices.
However, negative global news would trump positive New Zealand domestic news in terms of the kiwi's direction, with the RBNZ tightening only likely to soften a fall, Westpac senior market strategist Imre Speizer said in a commentary.
The 66USc level was key for the currency, and had held well so far, but a break lower would be significant and would point to 62USc, Mr Speizer said.
By 5pm, the kiwi was lower against the euro, yen and sterling, pushing the trade weighted index down to 65.39 from 66.79 on Friday.
The euro still hovered near four-year lows against the US dollar and was expected to slip as worries about Europe's financial system persisted.
Comments from US Federal Reserve chairman Ben Bernanke that European leaders were committed to the euro's survival, and had enough money to cover countries struggling with debt, failed to instil much confidence.
