Kiwi dollar gains on US and Aussie

The New Zealand dollar gained on the United States and Australian currencies overnight, against the background of a generally weaker greenback.

By 8am the kiwi was buying US66.35c, having peaked around US66.85c overnight from US65.99c at 5pm yesterday.

Bank of New Zealand currency strategist Danica Hampton said escalating fear about the fragility of the financial sector and reduced yield support had taken a heavy toll on the US dollar last night.

While US dollar weakness was the dominant theme, escalating risk aversion and concern the problems in the US financial sector would spill across into global issues had also taken a toll on risk sensitive currencies such as the NZ dollar against the yen.

Selling of the kiwi against the Japanese currency had helped knock the NZ currency off its highs against the greenback, Ms Hampton said.

By 8am the NZ dollar was buying 69.52 yen from 70.03 at 5pm yesterday, and was also down against the euro to 0.4625 from 0.4663.

The kiwi rose against the aussie to A83.61c by today's local open from A82.75c at 5pm. The trade weighted index at 8am was 62.92 from 63.09.

- NZPA