The New Zealand dollar posted some modest gains today after tumbling on Tuesday night as investors moved away from riskier assets.
"The NZ dollar spent the day licking its wounds. It was obviously pummelled overnight," said Mike Jones, currency strategist at BNZ.
"It has gradually recovered. The recovery was interruptedby some headlines that a Chinese bank regulator told banks to restrict new lending to local governments," he said.
There was demand from exporters at the lower levels.
The NZ dollar was at US69.45c at 5pm from US69.11c at 8am and US70.20c at 5pm on Tuesday.
"The currency moves overnight were especially vicious, with many key levels getting taken out, causing further downward moves," ANZ said today.
"Risk assets were under the hammer overnight, as investors exited equities, commodities and high yielding currencies, and made a mad dash into the relative safety of US Treasuries."
The US dollar had been the clear winner, although only by default, with the yen gaining as well, ANZ said.
The NZ dollar is around multi-month lows against the Australian dollar and a two week low against the yen overnight.
Tomorrow the National Bank of New Zealand business confidence survey will be of interest as will a testimony in the US by Federal Reserve chairman Ben Bernanke.
The NZ dollar was at 62.64 yen at 5pm from 63.90 at the same time yesterday. It fell to 0.5127 euro from 0.5155 yesterday. Against the Australian dollar it was at A77.73c from A77.99c yesterday, while the trade weighted index dropped to 64.50 from 65.04 yesterday.
