Kiwi treads water to stay above US75c

Wednesday 16th February 2011

The New Zealand dollar fought to stay afloat today, after flirting with the possibility of dropping below US75c.

ANZ Bank said the NZ dollar moved perilously close to support at US75.10c on Tuesday night and looked vulnerable to a move into the US74c zone today.

However, by 5pm the kiwi was at US75.37 from US75.24c at 8am and US75.72 at 5pm yesterday.

Both the NZ dollar and the Aussie fell sharply against the sterling as markets pushed forward their rate hike expectations for Britain on the back of high inflation.

The kiwi dropped to 46.64p from 47.14p at 5pm yesterday.

While inflation is not yet a problem in the US, a recent string of upbeat data has fuelled gains in US Treasury yields, helping drive the greenback higher against the yen.

The two-year Treasury yield hit a nine-month high near 0.9% on Tuesday, but retreated after retail sales slowed in January.

Meanwhile, the NZ dollar was little changed at 0.5571 euro from 0.5568 euro at 8am, and 63.12 yen from 63.04 this morning.

The trade weighted index rose slightly to 67.41 from 67.32 at 8am.

NZPA

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