The New Zealand dollar fell away from a six-week high against its Australian counterpart, and eased against the euro as Portugal successfully sold debt overnight.
By 8am today the kiwi was at A76.55c and 0.5805 euro from A77.02c and 0.5838 euro at 5pm yesterday.
The NZ dollar peaked aroundA77.30c at lunchtime yesterday as markets worried about the impact of the Queensland floods on the Australian economy.
ANZ bank said moves by the NZ dollar yesterday, particularly against the aussie, had been exaggerated and were corrected overnight.
The extension above resistance at A77.15c yesterday had been extremely brief, ANZ said.
"Overnight offshore markets realised that the Australian situation, while catastrophic, should be temporary and hence pushed the NZD lower."
ANZ expected a solid cap on the NZ dollar above A77c, while saying support at A75.94c could be explored this week.
BNZ currency strategist Mike Jones said that despite a rebound in risk appetite overnight, the NZ dollar against the greenback failed to share the upbeat sentiment.
While the reason for the NZ dollar's underperformance was difficult to pinpoint, heavy selling of the NZ dollar against the euro and Australian dollar most likely played a part in limiting the kiwi's gains to the US76.10c to US76.20c region.
At 8am the NZ dollar was buying US76.23c from US75.92c at 5pm.
The kiwi was also little changed at 63.15 yen, while the trade weighted index fell to 68.80 at 8am from 68.95 at 5pm.
