NZ dollar closes slightly down

The New Zealand dollar ended its domestic session down from its opening level but above a five-month low, close to US68c, it reached on Saturday.

Dealers expect US dollar strength and worries about sovereign debt in Europe to be ongoing themes.

The NZ dollar was at US68.68c at 5pm from US68.94c at 8am and US69.01c at 5pm on Friday. It fell as low US68.03c during the weekend.

Westpac said the NZ dollar fell 2.2 per cent last week and is 10.8 per cent below its peak of US76.35c last October.

Locally, the focus is on Prime Minister John Key's speech to Parliament tomorrow and retail sales data on Friday. But these events are expected to be overshadowed by any gyrations on global equity markets and the US dollar.

"Risk or fear of it, continues to drive global markets," said Rankin Treasury. Investors are asking who will save governments under threat of fiscal collapse.

Rankin Treasury ponders if the selling of the euro and so-called commodity currencies last week stopped being a correction and became a trend. "The next few weeks will answer this question."

The fall in the NZ dollar last week was seen as giving exporters some respite and they may take the opportunity to put in place cover at levels undreamt of a few weeks ago.

BNZ Capital senior strategist Danica Hampton said the NZ dollar was the worst performing currency last week.

The NZ dollar was around a 10-week low at 61.32 yen, down from 61.78 yen on Friday at 5pm.

By 5pm the NZ dollar was buying 0.5034 euro from 0.5030 on Friday. It was A79.36c from A79.49c on Friday. The trade weighted index was 63.98 at 5pm from 64.10 on Friday.

- NZPA