NZ dollar still around pre-Easter level, near 80USc

The New Zealand dollar finished the day still fluctuating around the 80USc level at which it opened at the end of the Easter break, down a little on the three-year peak of 80.35USc it hit on the eve of the long weekend.

It was 79.99USc at 5pm, compared with 80.00USc at 8am and 79.98USc at 5pm on Thursday, after a modest bounce in the US dollar -- up from its 30-month lows last week.

ANZ Bank said that while the NZ dollar had briefly been above resistance at 80.25USc during Easter weekend trading, it had lost its sparkle as commodity prices reversed highs.

Gold and silver prices hit fresh all-time highs overnight and BNZ said today that it expected that NZD/USD dips would be limited to around 78.80USc this week, and that if global commodity prices continued to climb "there is every chance we see a test of the post-float high of US82.13 sometime over the next week or so."

BNZ said sentiment toward the greenback would remain the biggest driver of the NZD/USD exchange rates in the short-term, though Thursday's Reserve Bank (RBNZ) policy announcement might provide some more domestic direction for the local currency.

"We believe the RBNZ will want to deliver a 'nothing to see here' message this week, including a signalled steady cash rate of 2.50 percent for the near future," BNZ said.

The trade-weighted index (TWI) key to monetary policy considerations was not far away -- at 68.81 points at 5pm -- from the RBNZ's March assumption of a 68.00 average for the June quarter.

Globally the key "event risk" of the week is the Federal Open Market Committee meeting in the US, on Thursday (NZ time) and its first regularly-scheduled news briefing by US Federal Reserve chairman Ben Bernanke to see how the US central bank plans to exit from its ultra-loose policy.

Overnight, the euro rose against the US dollar in a volatile but illiquid session with investors reluctant to make large bets in case the Fed shows no sign of changing its easy monetary policy.

The NZ dollar was buying €0.5487 at 8am today, little changed from its level at 5pm on Thursday, but clawed its way up to €55.06 euro at 5pm today. At the same time, it also gained on the transtasman cross-rate to 74.86Ac at 5pm today from 74.45Ac at 5pm on Thursday.

The kiwi dropped to ¥65.35 at 8am today from ¥65.80 at 5pm on Thursday and then fell fractionally further to ¥65.34 at 5pm.