The New Zealand dollar gained against the euro and was treading water against the greenback as investors remained jittery in the face of Italy's deepening political crisis.

The kiwi traded at 59.86 euro cents as at 5pm in Wellington from 59.76 euro cents as at 8am and 59.60 cents late yesterday. It traded at 69.10 US cents from 68.99 US cents as at 8am in and 69.33 cents late yesterday.

See live rates for the NZ-US $ below. Click for more information:NzForex Foreign Exchange Transfers

The euro remained under pressure in Asian trading as markets begin to factor in new elections in Italy.

Reuters quoted sources close to some of Italy's main parties saying there was now a chance that President Sergio Mattarella could dissolve parliament in the coming days and send Italians back to the polls as early as July 29.


Investors are increasingly concerned that a new election would strengthen the hand of anti-eurozone forces.

Westpac Banking Corp market strategist Imre Speizer said that biggest move came overnight and markets have largely traded sideways in Asia.

"We have to wait for the London market to open up again to see where they want to take it," he said.

According to Speizer, investors largely overlooked the Financial Stability Report from New Zealand's central bank as it indicated the financial system remains sound but is still exposed to three key vulnerabilities: household sector indebtedness, dairy sector indebtedness, and the banking system's exposure to international risks.

Investors will be watching for tomorrow's ANZ business outlook for any signs that business confidence is improving. On Friday the terms of trade data will garner interest, followed by US jobs data overnight Friday.

The kiwi fell to 75.04 yen from 75.61 yen yesterday, as the yen remained the safe haven of choice. It was little moved in Asia, after trading at 74.99 as at 8am. It traded at 92.15 Australian cents from 92 cents and at 4.4405 yuan from 4.4452 yuan. It traded at 52.12 British pence from 52.05 pence.

The trade-weighted index was at 72.85 from 72.91.

New Zealand's two-year swap rate was unchanged at 2.19 per cent while 10-year swaps fell four basis points to 3.07 per cent.