The New Zealand dollar's slump against the greenback regathered pace early today, as demand slows in the United States and the euro zone grapples with the spread of its debt crisis to Spain and Italy.
Widespread capitulation hit global equity markets as growing anxiety over the global economic outlook spurred a
flight to safe-haven bonds and sent stocks crashing to fresh lows for the year.
The kiwi fell in two steps during the past 24 hours, from around US86.50c at noon yesterday to near US85.20c within three hours, plateauing for 12 hours and then tumbling from 3am today to be at a three-week low US83.63c by 8am.
BNZ strategist Kymberly Martin said the NZ dollar had been the weakest performer over the 24 hours, as the US dollar strengthened due to its safe have appeal as risk appetite plunged.
The strengthening greenback also appeared to reflect accumulating frustration, and action by central banks globally, against the previous broad weakness in the US currency, Ms Martin said.
Against the Australian dollar, the kiwi had come under pressure after comments from Finance Minister Bill English that ``we would much prefer the dollar to be lower''.
The NZ dollar peaked around A80.60c against the aussie early today, but by 8am was down to A79.80c, similar to its 5pm level. The trade weighted index fell to 72.54 at 8am from 73.34 at 5pm.
The kiwi fell to 66.14 yen at 8am from 67.49 at 5pm, as the Japanese currency trimmed losses against the US dollar, having fallen sharply after Japan intervened by selling one trillion yen ($NZ15.2b) to curb the yen's strength.
The NZ dollar fell to 0.5922 euro at 8am from 0.5965 at 5pm, even as the European currency tumbled against the greenback.
The European Central Bank left interest rates unchanged at 1.5 percent, and said it would broaden its liquidity operations as it revived its bond buying program in the secondary market by buying Portuguese and Irish bonds.
