Kiwi rises on thin end-of-year trading

December 31 - Close

The New Zealand dollar's rapid rise on year-end positioning gave exporters little to cheer about going into the New Year holiday weekend.

The kiwi peaked at US72.68c in today's domestic trading session before easing to US72.57c at 5pm - more than US1c higher than its US71.50c level 24 hours earlier.

ANZ chief currency dealer Murray Hindley attributed the kiwi's rise offshore overnight and again today to the illiquid year-end market.

"There's no data to suggest this is other than thin market activity, with no Tokyo trading, and a continuation of position-squaring into the year end," he said.

The kiwi was also stronger on the cross rates, rising to A81.04c at 5pm from A80.20c at 5pm Wednesday and to 67.05 yen from 65.92.

The trade weighted index rose to 66.31 from 65.47.

Reuters reported from Hong Kong this afternoon that the US dollar was hovering near 16-week highs against the yen.

The dollar was trading at 92.39 yen, after hitting a 16-week high at around 92.77 in New York trade, as the yen continued to face pressure as a yield play and amid concern about the health of Japan's finances.

The US currency has rallied 7 percent against the Japanese currency this month but looks set to end a volatile year with a modest loss for 2009 against a basket of major currencies.

Reuters currency rates:
(5pm today - 5pm yesterday)

NZ dlr US dlr US72.57c - US71.50c

NZ dlr Aust dlr A81.04c - A80.20c

NZ dlr euro 0.5053 - 0.4992

NZ dlr yen 67.05 - 65.92

NZ dlr stg 45.20 - 45.00

NZ TWI 66.31 - 65.47

Aust dlr US dlr 89.55 - 89.14

Euro US dlr 1.4366 - 1.4320

US dlr yen 92.37 - 92.22

- NZPA