The New Zealand dollar dipped below 78 US cents as markets digest the coordinated moves by the world's biggest central banks to cut borrowing costs for European lenders in an effort to contain the region's debt woes.
The New Zealand dollar was little changed at 77.85 US cents at 8am
from 77.83 cents yesterday, after touching 78.01 cents in New York trading.
Markets are still analysing a surprise joint initiative by the US Federal Reserve, the European Central Bank and their counterparts in Canada, Britain, Japan and Switzerland joint agreement to cut interest rates on dollar liquidity swap lines.
The deal bolstered investor confidence but isn't expected to address the threat of indebtedness from some of Europe's highly indebted states. That leaves investors waiting until the Dec. 9 European Union leaders' summit, where it's expected a plan to deal with the debt threat will be unveiled.
The Spanish government sold 3.75 billion euros of five-year bonds paying a yield of 5.544 per cent, the highest since at least 2005, and attracted twice as much demand as what was on offer, while the 3.81 per cent yield achieved at an auction of 4.3 billion euros of French 10-year bonds was less than a November 3 sale.
