Currency: Dollar retreats to test support

The New Zealand dollar retreated from week highs as confidence dissipated and the local share market fell again.

The NZ dollar rose to US63.50c overnight but retreated to US62.03c by 8am and by 5pm was back at US61.70c.

The high was achieved after the US pledged to pour US$250 billion ($407.1 billion) into major banks. But the confidence that and other moves engendered was not sustained in any real appetite for so-called risky currencies like the NZ dollar.

The ANZ bank said sentiment for the NZ dollar appeared to have faded as strong equity market rallies looked decidedly like "a dead cat bouncing".

The NZ dollar tested support around US61.40c during the day.

Against the Australian dollar it was at A88.75c at 5pm from A87.92c at the same time yesterday but was down from the A89.15c at 8am.

Against the European currency the NZ dollar was little changed at 0.4542 euro from 0.4558 at 5pm, while it was 62.50 yen by 5pm from 63.71.

The trade weighted index was 60.84 at 5pm from 61.10 at 5pm.

Currency rates:

NZ dlr/US dlr US61.70c US62.28c

NZ dlr/Aust dlr A88.75c A87.92c

NZ dlr/euro 0.4542 0.4558

NZ dlr/yen 62.50 63.71

NZ dlr/stg 35.40p 35.49p

NZ TWI 60.84 61.10

Australian dollar US69.52c US70.81c

Euro/US dollar 1.3576 1.3681

US dollar/yen 101.35 102.33

- NZPA