NZ dollar falls from all-time high

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The New Zealand fell from yesterday's all-time high against the greenback, with investors' appetite for higher-yielding, or riskier, assets pulling back sharply after Federal Reserve Chairman Ben Bernanke poured cold water on hopes of further quantitative easing.

Speaking at the Fed's semi-annual monetary policy report to Congress, Bernanke made it clear that the central bank would not be implementing a further round of asset purchases in the near term with inflation close to target levels.

That brought equity and commodity markets back down to earth, having rallied yesterday on the hint that the so-called QE3 (quantitative easing three) was on the cards.

On Wall Street, the Standard & Poor's 500 Index fell 0.7 per cent to 1,308.85, Europe's Stoxx 600 fell 0.8 per cent to 267.68, and the 19-commodity Thompson Reuters Jefferies CRB Index fell 1.3 per cent to 344.73.

"People thought Bernanke had left the door open for QE3 yesterday, but he definitely closed that overnight," said Imre Speizer.

"That hurt equities, commodities and growth currencies which have been supported over the last year by the asset buying programme," and took the kiwi dollar down, he said.

The kiwi recently traded at 84.05 US cents, down from 84.39 cents yesterday, and fell to 72.63 on the trade-weighted index of major trading partners' currencies from 72.80.

It dropped to 78.46 Australian cents from 78.70 cents yesterday, and slipped to 66.58 yen from 66.74 yen.

It was little changed at 59.47 euro cents from 59.46 cents yesterday, and declined to 52.10 pence from 52.30 pence previously.

The New Zealand dollar hit a new post-float high of 85.07 US cents after Moody's Investors Service put the U.S. on notice over regulators' inability to lift the nation's debt ceiling and stronger-than-expected first-quarter local economic growth attracted buyers to the currency.

Europe's ongoing sovereign debt crisis was again in the headlines, with a Bloomberg report saying officials are concerned the International Monetary Fund will cut its share of a Greek rescue fund unless the plan includes deep cuts in Greece's debt burden.

That sets the stage for terse negotiations over the weekend when policymakers and bankers will meet again to thrash a debt restructuring plan.

Speizer said the kiwi may trade between a range of 83.80 US cents and 84.80 cents with the bias towards the downside.