The New Zealand dollar climbed from a six-month low as European Union leaders meet amid talk Greece could leave the euro zone and ahead of the budget locally which is expected to chart the route back to fiscal surplus.
The New Zealand dollar fell as low as 74.54 US cents overnight, from 75.24 cents yesterday at 5pm. That's the lowest since November 24. It recovered back to 75.15 cents just before 8am. The trade weighted index was little changed at 68.54 from 68.48.
Investors are awaiting the outcome of the European Union summit in Brussels, where speculation is mounting that Greece will leave the euro. The prospect of the indebted nation leaving the shared currency increased after it failed to form a government, following its May 6 elections.
Fresh elections will now be held in June. Greece's main political parties remain opposed to the terms of the nation's second bailout fund from the European Union and the International Monetary Fund.
"People are squaring up prior to the meeting," said Stuart Ive, currency strategists at HiFX. "I don't think that the market is completely convinced that Greece will leave the euro but there is a massive fear factor out there."