KEY POINTS:
The New Zealand dollar strengthened against the greenback during the early morning hours, as United States equities rebounded from 12-year lows allowing some easing of risk aversion.
By 8am the NZ dollar was buying US51.45c, having climbed fairly steadily from an overnight low around US50.75c about 3.30am, and was also up from US51.01c at 5pm yesterday.
The US dollar touched a three-month peak against the Japanese currency as risk aversion rose after US Federal Reserve Chairman Ben Bernanke warned that unless government efforts succeed in restoring financial stability, the US recession may not end in 2009.
The safe-haven bid for the US currency was also fed by a separate report showing US consumer confidence plunged to another record low in February, with expectations that economic conditions would continue to weaken and the jobs market further deteriorate.
While the US dollar was enjoying safe-haven status, investors were giving up on the yen, prompting a sell-off across the board in the Japanese currency.
The former link of the yen gaining as a perceived safety bid when stock markets tumbled has been taken over by worries about Japan's sharp economic downturn and as a lack of convincing policy steps erodes confidence.
The NZ dollar was around a fortnight-high against the Japanese currency by today's local open, buying 49.81 yen from 48.50 at 5pm.
The kiwi was little changed, compared to yesterday's local close, against the Australian and European currencies at 8am when it was buying A79.11c and 0.4006 euro. The trade weighted index was 52.52 at 8am from 52.16 at 5pm.
- NZPA
