Currency: NZ dollar drops slightly

The New Zealand dollar had a mixed session trading in a familiar range after the US$700 billion ($1.03 trillion) fix for the US financial crisis made progress.

By 5pm today the NZ dollar was buying US68.58c, from US68.64c at 8am and compared to US68.76c at 5pm on Friday.

The NZ dollar encountered some pressure when the US dollar gained on the deal agreed by US lawmakers on Sunday.

But it got some support from news that New Zealand's trade deficit narrowed slightly in August.

Congressional leaders and the White House agreed on Sunday to the rescue of the ailing financial industry after lawmakers insisted on sharing spending controls with the administration of President George W Bush.

The biggest US bailout in history won the tentative support of both presidential candidates and goes to Congress for a vote Monday.

Globally the focus is turning to worries about European banks, which is putting pressure on European currencies. The euro and sterling fell as Belgian-Dutch group Fortis was rescued and troubled mortgage lender Bradford & Bingley looked likely to be rescued.

The NZ market has building consents data this week as well as the National Bank's business confidence survey and political polls are also a focus ahead of the election.

Bank of New Zealand currency strategist Danica Hampton said global themes of US dollar sentiment and risk appetite would likely be the main driver of the NZ dollar this week.

The kiwi was at A82.57c against the Australian dollar by 5pm from A82.47c at 5pm on Friday, and was also buying 0.4727 euro from 0.4687 and 72.97 yen from 72.70 yen. The trade weighted index was 64.51 from 64.32.

- NZPA