The New Zealand dollar was little changed in local trading as investors cashed in gains amid growing uncertainty over the next direction for global financial markets. The kiwi traded at 85.52 US cents at 5pm in Wellington from 84.29 cents at 8am and 84.61 cents yesterday. The trade weighted index increased to 78 from 77.80 yesterday. Since the start of the new quarter, traders have been crystalising profits after significant multi-month gains in high-yielding assets such as stocks and risk sensitive currencies. That's led to declines on US stock markets from its record highs and massive slumps in precious metal prices as investors weigh up where to put their funds next. "There's been a decent rally in everything which all had to come off at some stage," said Alex Hill, currency strategist at HiFX in Auckland. "The kiwi is hanging around the mid-84 level, which is quite a significant technical level." He added it will likely dictate its next move. The local currency rose to 82.05 Australian cents from 81.69 cents yesterday with New Zealand's interest rate advantage still attracting investors. The yield on New Zealand's 10-year government bond was 3.28% at 5pm in Wellington, nine basis points above its Australian counterpart, even though Australia has a higher benchmark interest rate set by its central bank. The kiwi rose to 64.75 euro cents from 64.18 cents yesterday and gained to 55.41 British pence from 55.09 pence. It slipped to 82.92 yen from 83.20 yen yesterday.

Source