The New Zealand dollar fell to its lowest level in more than two weeks against the greenback and yen early today before staging a fightback.
With Greece's debt concerns and more bad jobs news out of the United States continuing to hang over markets, the greenback and euro fell against
the yen as safe-haven flows into the Japanese currency received a boost.
Worries of a sovereign debt default in the euro zone grew after ratings agency Standard and Poor's said it may cut Greece's rating one or two notches within a month, while investors' appetite for risk fell further on news that first-time filings for US unemployment benefits unexpectedly rose in the latest week.
Higher-yielding currencies such as the NZ dollar also came under heavy pressure.
The kiwi dropped to around US68.45c but by 8am was back up to US69.03c, above the US68.85c at 5pm yesterday.
The NZ dollar also fell to around 60.90 yen then lifted to 61.52 by the local open, only slightly down on the 61.64 yen at the local close.
The kiwi's climb off its early morning lows was less robust against the European currency, with the NZ dollar down from 0.5108 euro at 5pm to 0.5089 at 8am.
Against the Australian dollar, the kiwi largely trended upwards after hitting its lowest level in nearly 10 months around A77.30c shortly before yesterday's local close. By 8am it was up to A77.80c. The trade weighted index lifted to 64.12 at 8am from 64.05 at 5pm.
ANZ bank said NZ dollar moves yesterday had been weighed on by over-positioning ahead of the Reserve Bank of Australia's interest rate decision next week. A resulting correction took place overnight, mainly against the aussie.
Greece's debt concerns were part and parcel of the global deleveraging process, which was potentially extremely disruptive, but ANZ said it remained confident this country would not be singled out by investors.
- NZPA
