Kiwi dollar edges back over US70c

The New Zealand dollar dragged itself back above US70c early today, after falling away yesterday from a year-high around US70.85c reached on the weekend.

By 8am today the kiwi was buying US70.02c, from US69.78c at 5pm yesterday, having dropped to around US69.60c yesterday evening.

The US dollar has come under heavy pressure this month as growing optimism about a global economic recovery encouraged investors to move out of safe havens into riskier investments.

But BNZ Capital senior strategist Danica Hampton said the kiwi had started the week on a fragile footing against the US dollar.

"Escalating trade tensions between China and the US knocked investor confidence yesterday," she said.

"A slide in Asian equities and weaker commodity prices simply added to the risk adverse climate."

Before long, investors were ditching growth sensitive currencies such as the NZ dollar, in favour of the relative safety of the greenback and yen, said Hampton.

Weaker than expected retail figures for July had not helped sentiment towards the NZ dollar.

- Reuters reported the greenback's safe-haven appeal was eroded as US stocks edged higher, erasing early-session losses and reviving risk appetite.

By 8am the kiwi was up to 63.66 yen from 63.06 at 5pm, and was little changed against the European and Australian currencies at 0.4789 euro and A81.33c. The trade weighted index was 63.89 at 8am from 63.77 at 5pm.

- NZPA