Kiwi retreats against euro

Photo / File

The New Zealand dollar slipped back against the euro from exchange rates last seen in 2006 and in 2007 - to trade at €0.5874 at 5pm. It was €0.5878 at the same time on Monday.

Its sharp rise overnight and more gradual decline through the day pivoted around international reaction to a statement by new International Monetary Fund managing director Christine Lagarde that the IMF was not yet ready to discuss terms of a second Greek bailout.

Stock market falls overseas were also stoked by growing worries over the euro zone's debt crisis and investors were seen to be seeking refuge in less-risky bonds, such as in Japan and the US.

The kiwi rose from €0.5878 at 5pm on Monday to peak around €0.5930 shortly after midnight, and was at €0.5906 as NZ markets began yesterday morning.

The euro fell below US$1.40 for the first time since May and hit a record low against the Swiss franc. At 5pm it was trading at US$1.3952, from US$1.4193 on Monday.

The kiwi also fell further against the US dollar - still dropping sharply from its 30-year high around US83.80c on Friday night to US81.95c at 5pm yesterday, from US83.43c at the same time on Monday.

IG Markets strategist Ben Potter said in Melbourne that regional markets across Asia were "blooded" following the very negative leads from Wall Street, which were being driven by fears the European sovereign debt crisis was spreading.

The NZ dollar also fell consistently through the day against the Australian dollar: at 8am it was buying A77.78c, and at 5pm it was A77.39c. The kiwi fell to 65.70 at 5pm from 67.38, while the trade weighted index dropped to 71.39 at 5pm, from 72.21 on Monday.

-NZPA