The New Zealand dollar fell from its recent two-month high against the greenback after US employment figures missed forecasts, reigniting fears the world's biggest economy isn't recovering as quickly as expected.

The New Zealand dollar fell to 79.61 US cents just before 8am from 79.63 cents at the close of trading in New York and 80.15 cents at the close of local trading on Friday. The trade weighted index decreased to 72.55 from 72.70.

Weak US job numbers dragged down markets on Wall Street with the Dow Jones down 1 per cent to 12772.47, while the Standard & Poor's 500 index dropped 0.9 per cent to 1354.68. The US added 80,000 jobs in June after a revised gain of 77,000 in May, according to Labor Department data. Economists had forecast an increase of 100,000, according to a Bloomberg survey.

"Market sentiment globally has continued to sour," said Mike Jones, market strategist at Bank of New Zealand. "The kicker for markets was that the number wasn't weak enough for QE3," sapping demand for risk-sensitive assets such as the kiwi dollar, he said.


Investors will be eyeing the Federal Reserve's next policy statement on August 1 after Chairman Ben Bernanke said in June that the central bank was prepared to consider additional steps to spur growth and employment, including further asset purchases.

Jones said he expects the New Zealand dollar to finish the week lower, trading in a range of 78.70 US cents to 80 cents this week, with the focus to remain on "fears of a global slowdown".

New Zealand data set for release next week includes electronic card transactions, the accommodation survey and the food price index from Statistics New Zealand. The ANZ-Roy Morgan Consumer Confidence and Bank of New Zealand - Business NZ Performance Manufacturing Index are due out on Thursday. The New Zealand Institute of Economic Research's June quarterly survey of business opinion is due tomorrow.

The New Zealand dollar increased to 78.04 Australian cents from 77.93 cents at the close of trading in New York. It was largely unchanged at 51.45 British pence from 51.40 pence and little changed at 64.95 euro cents from 64.89 cents. The kiwi traded at 63.38 yen from 63.42 yen last week.