NZ dollar closes under US71c

The New Zealand dollar slipped to a 10-day low today as equity markets tumbled and investor optimism dissipated.

The NZ dollar was at US71.20c at 5pm from US72.12c at the same time yesterday. It slipped below US71c to around US70.80c during the session.

Disappointing manufacturing data in the United States fuelled worries about a global economic recovery and boosted the greenback's safe-haven appeal.

"Asian equities have been heavy and short-term speculative traders that had got long kiwi earlier in the week have been bailing out of those positions," said BNZ currency strategist Danica Hampton.

She expects the market to consolidate ahead of the US non-farm payroll report for September on Friday US time.

"Markets have got so optimistic on the global outlook in the past few months that if the data does disappoint we are liable to see further liquidation of equity markets and further downward pressure on kiwi," she said.

A "sell on rallies" mentality was likely in the near-term and foreign markets would dictate direction next week with little new data due locally.

The NZ dollar was unchanged at A81.84c, but it fell from a 16 month high against the euro around 0.4973 on Thursday night to be 0.4894 at 5pm today from 0.4932 at the same time yesterday.

The NZ dollar was also buying 63.59 yen from 64.90 at 5pm.

The trade weighted index was 64.95 from 65.58.

- NZPA