NZ dollar slips after bouncy trade

Photo / Dean Purcell

The New Zealand dollar slipped in a bouncy trading session as the euro became the focus of investors' worries.

Investors fretted about budget problems in Ireland and some of the euro zone's other weaker links and trimmed recent bets against the US dollar.

Weak German industrial output data also hurt the euro, while a general move away from risk weakened the Australian and NZ dollars.

The NZ dollar had a bumpy ride overnight, from US78.93c at 5pm it dropped to around US78.40c at one point, although by 8am today it was back to US78.82c.

Against the European currency, the kiwi was buying 0.5656 euro at 8am, little changed from its 5pm level, while the NZ dollar slipped to A77.81c from A77.99c against the Australian dollar, and was down to 63.98 yen from 64.10.

BNZ markets strategist Mike Jones said that after surging nearly 4 per cent last week, the NZ dollar had paused for breath since yesterday morning.

News yesterday that biosecurity officials were investigating reports of a possible bacterial disease on North Island kiwifruit vines helped the NZ dollar start the week on the back foot, Jones said.

A broadly stronger US dollar also kept a lid on further gains overnight by the kiwi against the greenback.

ANZ said the NZ dollar, having started a corrective move, may continue towards the US77c territory, helped by a weaker euro and aussie.

The trade weighted index was down to 69.39 at 8am from 69.54 at 5pm.

- NZPA