The New Zealand dollar held on to some of its earlier gains, but was unable to make further headway when a massive relief rally on Wall Street petered out today.
By 5pm, the kiwi was at US54.13c, up from US53.20c late yesterday afternoon but below its US54.86c levelabout mid-morning.
The kiwi fell to a six-year low below US52c on Friday as recession fears shook world markets. However, the US government decision to rescue banking giant Citigroup spurred Wall Street to its best two-day run since the aftermath of the 1987 stock market crash.
Other equity markets also gained, but to a lesser degree.
"Once again, any rally seems to be short-lived," said Murray Hindley, chief foreign exchange dealer at ANZ Institutional Bank.
"We're going to be contained by what happens again tonight in the bourses," he said, noting a lack of local economic data.
Against the aussie, the kiwi was at A84.55c, down from A84.80c late yesterday afternoon. The currency was steady against the euro, stronger against the yen at 52.17, and a touch firmer against sterling.
The yen edged up against the euro after falling around 5 per cent the previous day on the rally in US stocks, which heralded an increasing appetite for risk.
Trading is expected to be fairly light this week. Japanese financial markets were closed on Monday for a national holiday, while US markets will be closed for the Thanksgiving holiday on Thursday.
