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New Zealand Dollar Firms

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Fuseworks Media
Fuseworks Media

Wellington, March 27 NZPA - The New Zealand dollar firmed mildly overnight despite global equities again heading south.

The kiwi was buying US80.39c at 8am against US80.31c at yesterday's close. It briefly topped US81c in overnight trading.

The kiwi's gain was in line with a general weakening of the US dollar, which fell for a second straight session after an unexpected drop in durable goods orders heightened worries about the health of the US economy and backed expectations of further interest rate cuts.

However, negative dollar sentiment eased after a slightly better-than-expected United States new home sales report for February, although the data did little to ease concerns about the beleaguered sector.

Both the durable goods and housing reports contrasted with European data that suggested the euro-zone economy was much healthier than that of the US, despite a soaring euro and higher interest rates.

ANZ Bank said in its morning briefing that the shine was rapidly disappearing from the New Zealand dollar.

"The teflon attributes of the NZD are likely to be sorely tested in the coming days as economic data highlights to global market participants the vulnerability of the NZ dollar.

"Expect the NZD to see increased selling pressures leading to tests of support."

Eyes today will be on the December quarter current account report and February trade data. Economists are forecasting a $3.5 billion quarterly current account deficit that would take the annual deficit to nearly $14b.

Against the Australian dollar, the kiwi continued to back away from a near-seven-week high touched yesterday. It was buying A87.58c from A87.70c at the close yesterday, and the A88.17c high hit early the same day.

The trade weighted index was at 71.26 from 71.63 at 5pm yesterday.

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