The New Zealand dollar eased off its eight-week high of US74.30c yesterday, as negative Australian data undercut its strength.
BNZ currency strategist Mike Jones said recently weak US data had seen a gradual rise in the kiwi, since it was last at US74.30 on November 18, but Australian home-loan statistics released yesterday, which were expected to be "flat", had instead shown a 6.5% decline.
"The kiwi [dollar] acted in tandem to the Australian announcement and was down just below US74c at one point," he said when contacted.
The BNZ is, however, picking a gradual restrengthening of the kiwi through to a mid-year peak of US78c, based on the country's economic recovery, but the bank then picked that the Reserve Bank would resume interest rate rises and dampen the kiwi down towards a US74-US75c range towards the end of the year.
"We can't see there being any substantial [New Zealand] economic recovery because of the high dollar" and damage that will do to export earnings, Mr Jones said.
While the US economy was showing signs of strengthening, it was still "very weak" and the kiwi's strength was dependent on when the US Federal Reserve began raising interest rates from record lows, he said.
