The New Zealand dollar briefly touched US55c for the first time in nearly two weeks but had a sharp drop shortly before the local market opened.
By 8am the kiwi was buying US54.31c, below the US54.75c at 5pm yesterday.
BNZ currency strategist Danica Hampton said the reason forthe kiwi's drop late in the overnight session was hard to pinpoint, but a dive in United States' equities seemed to be the main catalyst.
Overnight, a stabilisation in global equities and lingering concern about how the US government would fund its fiscal spending splurge saw the greenback weaken broadly and that lent a bit of support to the NZ dollar, she said.
The NZ dollar also had a dive shortly before the local open against the yen. Having peaked above 51 yen, the kiwi was down to 50.32 by 8am compared to 50.70 yen at yesterday's local close.
Against the euro, the NZ dollar tumbled after 5am to be at 0.4172 by 8am, down from 0.4225 at 5pm yesterday.
The kiwi was also at A82.54c against the Australian dollar by 8am, little changed from its level at the local close. The trade weighted index was 54.58 at 8am from 55.03 at 5pm.
ANZ bank said markets remained in neutral awaiting the outcome of a proposed bailout deal for US automakers.
Underlying NZ dollar strength off the back of stabilising interest rates may continue today, ANZ said.
