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NZ Dollar Pulls Back On Profit Taking

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, May 28 NZPA - The New Zealand dollar pulled back from three-week highs against major currencies as traders took profits today.

At the close of the local session, the dollar was buying US78.91c, slightly down on its US79c close yesterday.

It topped US79c for the first time in three weeks early yesterday afternoon, spiking up to its recent peak around US79.20c a few hours later.

It has been supported by higher Reserve Bank inflationary expectations and marginally improved business confidence.

ANZ Bank said today the NZ dollar should now find good support initially around US78.75c and look to build a base.

Marginally improved May business confidence in a National Bank survey and higher Reserve Bank inflationary expectations were largely responsible for the expected topside break for the NZ dollar, ANZ said.

Against the Australian dollar, it eased to A81.09c from A82.15c yesterday, while the trade weighted index ended on 70.00 from 69.91 at yesterday's local close.

The Australian dollar held steady against the greenback, ending here on US96.13c.

The US dollar steadied after rebounding from one-month lows against the euro the previous day, when a slide in oil and an unexpected rise in US house sales prompted traders to buy the US currency.

The dollar climbed broadly earlier after a report showed US sales of newly built single-family homes increased in April from March, the first rise since October. But April sales also recorded the biggest year-on-year drop in nearly 27 years.

The market is focused on oil, which fell to $US128 a barrel, moving away from record highs hit above $US135 last week. The dollar tends to rise when oil falls.

NZPA WGT Reuters sml dj

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