The New Zealand dollar surged higher today along with battered global equity markets but moves in offshore markets will continue to dictate direction.
The NZ dollar tested multi-year lows on Thursday night, moving in a band between US56.30c and US55.10c.
At the bottom of the range, touched around7am, it was near its lowest level since April 2003. The only time it has been lower in that period was towards the end of last month.
During the domestic session the NZ dollar rose above the US57c figure when a surge in the US share market at the end of its session caused short covering and comment about reduced risk aversion.
By 5pm the NZ dollar was US56.65c, up from US56.15c at 5pm yesterday.
The Australian dollar was almost two US cents firmer during its session on the back of the strong rally on Wall Street.
But the euphoria is expected to be short lived as US retail sales data for October, due out tonight, reminds financial markets about the tanking US economy.
Also news will flow from the meeting of leaders of G20 nations in Washington at the weekend.
Against the surging Australian dollar, the kiwi fell to A85.70c at 5pm from A87.45c yesterday.
The NZ dollar also dropped to near 52.40 yen, its lowest level against the Japanese currency in nearly seven years, apart from the period in late October. But it was 54.99 yen by 5pm.
The NZ dollar was also buying 0.4430 euro at 5pm, down from 0.4495.
The trade weighted index was down to 57.53 at 5pm from 57.58.
