KEY POINTS:
The New Zealand dollar slid 1c against the greenback yesterday as investors again fled risky investments and sent US share prices down sharply.
The kiwi closed US1c below Monday's US76.23c close.
ANZ bank said yesterday that despite US dollar weakness, the kiwi was sold off as some risk aversion returned.
Credit concerns were reignited in a reminder that the underlying problem in global financial markets had not been resolved, ANZ said.
The biggest bank in the US, Citigroup, announced a poor result because of debt writedowns and a poor outlook.
The bank's chief financial officer, Gary Crittenden, said he was not optimistic that markets for collateralised debt obligations and other fixed-income products, hammered by this summer's credit crunch, would soon recover.
Citigroup and other global banks earlier said they were pooling money to prevent investment funds from having to dump assets on to the market. The news sent stocks down over 1 per cent although the local market dropped only 0.5 per cent.
The US stock market also faced headwinds from record high crude oil prices, which surged to US$86 a barrel, threatening to crimp consumer and business spending.
The kiwi also slid against the currencies of other major trading partners, closing on A84.82c against the Australian dollar from A85.46c on Tuesday. The trade weighted index lost 1.3 per cent to 71.55.
Traders said US dollar weakness would continue if expectations further tilted towards the possibility of the Fed cutting rates by 25 basis points from 4.75 per cent when it holds a policy meeting this month.
- NZPA
