The New Zealand dollar moved into a lower range overnight settling into a range just under the US51 cent mark.
At 8am today it was worth US50.89c after being worth US51.24c at 5pm yesterday. It reached a high of US51.22c and a low of US50.60c overnight after scaling close to US52c earlier in the week.
Heavy losses across global equities and risk aversion saw investors ditch growth sensitive currencies like the New Zealand dollar in favour of the relative safety of United States dollar last night, said BNZ currency strategist Danica Hampton.
Media reports suggesting atypical scrapie had been found in a flock of New Zealand sheep at British Research facility had the potential to spook currency markets.
However, this morning's media coverage offers a relatively sanguine view of the situation (suggesting its just old sheep and "probably not contagious") and there has been minimal impact on the NZD, Ms Hampton said.
Today the backdrop of risk aversion and soft global equities should continue to underpin the US dollar and ensure bounces in NZ/US dollar are limited.
"For today, we suspect bounces in NZD/USD will be limited to US51.50c. Solid support is expected around the US50.00-US50.20 region."
At 8am today, against the Australian dollar, the kiwi was up to A79.79 from A79.57 at 5pm yesterday.
Against the euro it was down to 0.4042 from 0.4053, against the Japanese yen it was down to 47.05 from 47.45 and against the British pound down to 35.72p from 36.07p.