KEY POINTS:
The New Zealand dollar was heading back down toward US76c late in the session after consolidating for most of the day.
The NZ dollar hit a six-week low against the greenback around US75.35c about 6pm yesterday, before bouncing back overnight as currency investors took their cue from recovering sharemarkets.
By 5pm, it was back to US76.23c, about half a US cent from its session high but little changed from US76.30c at 8am.
BNZ said that after weeks of looking expensive, the currency is close to a fair value range it estimates to be between US73.30c and US75.30c.
But Bank of New Zealand currency strategist Danica Hampton said the fortunes of the NZ dollar continued to be closely tied to global equity markets, credit concerns and the associated fall-out for carry trade sentiment.
The US stock market had staged a rally late in its session and the Australian market was also higher as concerns about financial stocks subsided.
Risk aversion has increased and as a part of that trend carry trades in which investors bought high yielding currencies like the NZ dollar are being unwound.
The NZ dollar has fallen sharply against the yen, but by 5pm it was 90.43 from 89.45 yesterday.
The NZ dollar was at a seven-week low against the Australian dollar around A89c before picking up to be buying A89.52c at 8am and A89.45c at 5pm.
The trade weighted index was 73.17 at 5pm from 72.64 at 5pm yesterday.
Overnight, the US dollar edged higher versus the euro and yen in volatile trading, as investors tracked choppy movements in US equities after paring back extreme positions on the Japanese currency that had built up on recent credit concerns.
"The (US) dollar is slightly higher, but still following the wild swings in the stock market," said Mark Meadows, a market analyst at Tempus Consulting in Washington, DC.
Reuters currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US76.23c US75.63c
NZ dlr/Aust dlr A89.45c A89.16c
NZ dlr/euro 0.5579 0.5537
NZ dlr/yen 90.43 89.45
NZ dlr/stg 37.52p 37.35p
NZ TWI 73.17 72.64
Australian dollar US85.19c US84.78c
Euro/US dollar 1.3663 1.3653
US dollar/yen 118.68 118.30
- NZPA
