The New Zealand dollar managed partial recoveries against major currencies, but ran out of steam in an effort to pull away after hitting a decade low against the Australian dollar.
The kiwi took a hit yesterday on weak retail data, with seasonally adjusted retail sales falling 2.5 per cent inOctober.
The Treasury's Half Year Economic and Fiscal Update later yesterday maintained the dour mood, although the data in that release was expected and largely factored in by the market.
By 8am today the NZ dollar was buying US75.38c from US74.97c at 5pm.
The kiwi was also up to 62.88 yen after falling to a two-week low around 62.40 shortly before 5pm, and lifted to 0.5618 euro after dropping to around 0.5580, its lowest level in nearly six weeks.
After dipping to A75.1c against the aussie around 4.30pm yesterday, its lowest point since late 2000, the NZ dollar dragged itself up to around A75.65c overnight but then fell away again to A75.34c by 8am.
BNZ currency strategist Mike Jones said gains by the NZ dollar against the greenback overnight came thanks to a broad-based weakening in the US currency.
Market sentiment was bolstered by a successful Spanish bond auction and soothing words from European Central Bank President Jean-Claude Trichet, Jones said.
Global equity markets also posted modest gains, indicating a mild firming in risk appetite.
Another factor seen influencing the market was stronger-than-expected US retail sales data that lifted bond yields and optimism about the US economy.
Around 8.15am today the US Federal Reserve said it would maintain the pace of its $US600 billion ($NZ797b) Treasury bond-buying programme because a slowly improving economy was still too weak to bring down high unemployment.
Fed policymakers said they would continue to monitor the bond-buying programme.
They left open the option of buying more bonds if the economy weakened, or fewer if it strengthened more than expected.
The bond purchases are intended to lower long term interest rates, lift stock prices and encourage higher spending.
