The kiwi dollar rose to 63.39 euro cents overnight. Photo / File
The kiwi dollar rose to 63.39 euro cents overnight. Photo / File
The New Zealand dollar pared its loss after a strong GlobalDairyTrade auction offset rising investor pessimism amid speculation Spain will seek a bailout to soothe fears the Europe's debt crisis is spreading.
The kiwi traded at 81.28 US cents at 8am in Wellington, having dropped as low as 81.05 cents,from 81.40 cents yesterday at 5pm. The trade-weighted index fell to 72.41 from 72.80 yesterday.
That lifted the kiwi from its low after growing fears about Spain's ability to meet its austerity targets sapped investors' appetite for higher-yielding, or riskier, assets. Traders are waiting for the two-day European Union summit on Thursday, where rescue packages for Spain and Greece are likely to be discussed.
"The GlobalDairyTrade auction looked pretty good with whole milk prices pretty strong," said Alex Sinton, senior dealer at ANZ New Zealand. "We did a lift off the low after that auction - the New Zealand dollar probably won't go anywhere today - we are looking for direction from offshore."
The local currency is likely to trade in a range of between 81.10 US cents to 81.60 cents, Sinton said.
In the US, the world's largest economy, third-quarter earnings season set the tone for equities. The Standard & Poor's 500 Index rose 0.9 per cent and the Dow Jones Industrial Index gained 0.8 per cent after Johnson & Johnson and State Street earnings beat expectations. Investors are eyeing results from Intel and IBM due out on Wednesday.
Better-than-expected US data also helped bolster the mood. The consumer price index climbed 0.6 per cent in September, while the private sector builder sentiment index rose to 41 in October, the highest level in a little over six years.
There is no other significant New Zealand data set for release until the international travel and migration numbers from Statistics New Zealand on Friday.
The New Zealand dollar fell to 62.30 euro cents from 62.93 cents yesterday and declined to 50.43 British pence from 50.76 pence. The New Zealand dollar dropped to 79.17 Australian cents from 79.46 cents, and decreased to 64.11 yen from 64.28 yen.
