The New Zealand dollar bounced off a new record low of US41.32c overnight on Thursday but closed in a fragile state, its short term future hinging on euro moves.
"The kiwi is still looking pretty heavy," Earl White, director at corporate Treasury consultancy Greenwich Financial Services, said. It finished at US41.88c.
The kiwi got little solace from the Australian dollar, which was also up off an all-time low but struggling to get above US56c despite central bank intervention.
It closed locally at 55.93c (56.43c) and the New Zealand dollar made ground on the cross, rising to A74.85c from 74.40c).
Mr White said a meeting of European Finance Ministers over the weekend could result in European Central Bank intervention. However, he said intervention would have to be concerted and he believed the United States would not participate ahead of a presidential election since cheap European imports were a compensation for higher oil prices.
Apart from the euro, one hope was the aussie getting some support from economic activity generated by the Olympics.
"If those two can recover a little bit in the short term the kiwi may drag itself up - it would not be unreasonable to see a cent or so from here on the upside just because we've had such a big move down. But until we start to see people wanting to buy kiwi because they believe it's cheap, it's going to struggle to go too much higher," Mr White said.
- NZPA
<i>Currency:</i> Fragile kiwi comes off lows
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