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Kiwi may have run out of steam

NZ Newswire logoNZ Newswire 3/02/2017 Rebecca Howard

The New Zealand dollar continued to ease back on Friday ahead of a three-day weekend on signs that a recent rally may be running out of steam.

The kiwi dollar fell to US72.73 cents as at 5pm on Friday from US72.85c at 8am and US72.98c late Thursday. It fell to 95.10 Australian cents versus A95.52c as the Aussie continued to benefit from stellar trade data this week.

The kiwi has rallied around 6 percent since late December but Friday was "fairly stagnant", says Chris Weston, chief market strategist at IG Markets.

"The Kiwi dollar is making signs of a bit of a top at the moment... We are starting to see signs that the momentum is waning."

The market was waiting for jobs data out of the US, later in the global trading day, Mr Weston said.

The market was expecting a rise of around 175,000 jobs and a higher number will push the US dollar higher.

On Friday, the kiwi continued to gain against the British pound as traders in Asia pulled back on expectations of a British hike in interest rates this year after overnight comments from the Bank of England.

The BoE left its key interest rate unchanged at 0.25 per cent but the pound fell when it was slightly less hawkish than expected. The kiwi traded at 58.09 British pence from 57.59p late Thursday.

The kiwi was at 4.9972 yuan from 5.0180 yuan and at 67.62 euro cents from 67.59c and at 82.24 yen from 82.23 yen,

The trade-weighted index was at 79.12 from 79.35.

New Zealand's two-year swap rate fell 4 basis points to 2.36 points while the 10-year swaps fell 3 basis points to 3.54 per cent.

New Zealand markets are closed Monday for Waitangi Day.

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