The New Zealand dollar fell away from and then returned to above the US71c level on a day in which Chinese policy toward the yuan was the focus of investors.

By 5pm the NZ dollar was at US71.06c from US71.01c at 8am and US70.39c at 5pm yesterday.

The NZ dollar rose above US71c for the first time in five weeks after China's central bank said at the weekend that it was giving up a two-year-old peg of its currency to the US dollar.

It fell after China's central bank left the yuan's parity rate against the US dollar unchanged Monday at 6.8275.

"There was a bit of volatility on the Chinese news. There were jitters around lunchtime when the Chinese rate set was kept unchanged," said Mike Jones, senior currency strategist at BNZ.

The worries about how quickly Chinese policy would change were fleeting though.

The local market was expected to trade sideways ahead of current account data on Wednesday and gross domestic product data on Thursday.

The NZ dollar also gained to 0.5717 euro at 5pm today from 0.5678 at the same time on Friday, and was up to 64.50 yen from 63.88.

Against the Australian dollar, the NZ dollar fell to A80.68c at 5pm from A80.98c on Friday, while the trade weighted index was up to 68.04 from 67.69.