Dollar trades against pressured greenback

NZ currency market - open

The New Zealand dollar traded overnight in a range between US73.20c and US73.90c against the greenback, which was pressured by a steep drop in United States pending home sales.

Investors also moved to reduce December's bullish bets on the greenback before the US jobs report later this week.

While the US dollar tumbled against the yen, it rose against the euro in choppy technical trading.

Around 8am the kiwi was buying US73.36c, little changed from its level at 5pm yesterday.

The NZ dollar also lifted to 0.5110 euro at the local open from 0.5071, but was down to 67.18 yen from 67.53 at yesterday's local close.

Against the Australian dollar the kiwi made modest gains, buying A80.55c at 8am from A80.30c at 5pm. The trade weighted index lifted to 66.70 from 66.57.

BNZ Capital senior strategist Danica Hampton said growing optimism about prospects for growth in 2010 had helped underpin growth sensitive currencies such as the NZ dollar in the past few days, but last night's mixed US data did little to bolster global sentiment.

Fonterra's online auction overnight also took some of the shine off the NZ dollar against the greenback, Ms Hampton said.

The average price of whole milkpowder fell 7.1 per cent in the auction, which was consistent with dairy prices peaking. It was worth noting that average prices were still up about 80 per cent from lows in July.

The following are Reuters currency rates:
(Today 8am – Tuesday 5pm)

NZ dlr US dlr US73.36c - US73.27c

NZ dlr Aust dlr A80.55c - A80.30c

NZ dlr euro 0.5110 - 0.5071

NZ dlr yen 67.18 - 67.53

NZ dlr stg 45.89 - 45.54

NZ TWI 66.70 - 66.57

Aust dlr US dlr 91.06 - 91.21

Euro US dlr 1.4360 - 1.4424

US dlr yen 91.61 - 92.17

- NZPA