The New Zealand dollar tumbled against the greenback early today as it retreated from yesterday's 15-month high.
By 8am the kiwi was buying US74.76c, having fallen sharply from the US75.50c level around midnight, before making a small recovery.
Yesterday morning the NZ dollar had peaked at US75.75c, according to Reuters
data.
ANZ bank said of the kiwi's rise that the currency had "extended well past the boundaries of sanity".
It expected the kiwi to be under reasonable pressure to stay below US75c today.
The US dollar recovered from a 14-month low against a basket of currencies in volatile trading as policymakers in Europe and Asia commented on the greenback's decline and options-related buying kept it from pushing though key levels.
Wall Street also fell as weak US inflation and housing data offset strong quarterly earnings, denting investor appetite to sell the low-yielding greenback in favour of higher-yielding currencies more closely correlated with economic recovery.
BNZ Capital strategist Mike Jones said that in the past few days the NZ dollar had been caught in a perfect storm of rising risk appetite, increasing commodity prices and weakness in the US dollar.
"However, investors' appetite for risk hit a speed bump last night following signs the US recovery may be more tepid than some had been banking on," he said.
The NZ dollar also fell against other major currencies. Around 8am the kiwi was buying 0.5008 euro and 67.80 yen from 0.5029 euro and 68.06 yen at 5pm yesterday.
Against the Australian dollar the kiwi was little changed at A81.07c by the local open, while the trade weighted index was down to 66.91 around 8am from 67.25 at 5pm.
- NZPA
