Dollar consolidates after volatile night

The New Zealand dollar consolidated during its domestic session after a volatile night on Wednesday.

The NZ dollar fell sharply against the greenback overnight in the wake of a slide in the Shanghai stockmarket yesterday, but then zoomed up out of its hole.

By 5pm it was US67.45c from US67.44c at 8am and US67.57c at 5pm yesterday. It dipped to around US66.65c shortly after midnight.

ANZ bank said the Shanghai stockmarket's 4.3 per cent fall yesterday triggered a bout of risk aversion that saw the NZ dollar head sharply lower.

"However, sentiment just as quickly turned around, and with it came buying support for the NZ dollar," ANZ said.

Appetite for risky currencies like the NZ dollar improved when the US equity market lifted and the oil price rose. Oil was steady above US$72 ($108) a barrel on Thursday, after rising more than 4 per cent yesterday.

NZ dollar direction is again being driven by US dollar direction and moves in equity markets, dealers said.

The Shanghai index gained on Wednesday, removing that source of concern on the day.

The NZ dollar fell to 0.4743 euro at 5pm from 0.4775 at the same time yesterday, and was 63.62 yen from 63.92.

Against the Australian dollar, the NZ dollar fell to A81.20c from A81.48c, while the trade weighted index fell to 62.85 from 63.09.

Reuters currency rates:

5pm today 5pm yesterday

NZ dlr/US dlr US67.45c US 67.57c

NZ dlr/Aust dlr A81.20c A81.48c

NZ dlr/euro 0.4743 0.4775

NZ dlr/yen 63.62 63.92

NZ dlr/stg 40.78 40.83

NZ TWI 62.85 63.09

Aust dlr/US dlr 83.01 82.87

Euro/US dlr 1.4227 1.4146

US dlr/yen 94.39 94.67

- NZPA