KEY POINTS:
The New Zealand dollar has slumped 2c against the greenback since Friday evening as investors' appetite for risk evaporated and the United States currency rallied across the board.
By 8am today the kiwi was buying US76.44c from US78.46c at 5pm on Friday.
That happened as the US dollar rallied against other major currencies for the third consecutive week.
The greenback was bolstered by a string of US economic reports showing higher-than-expected growth in consumer spending and higher inflation, though the data eased some concern that the credit crisis would drag the US economy into a recession.
The US dollar posted its largest daily increase against the euro in almost three years overnight Friday, after strong US consumer price data trimmed expectations for further interest rate cuts by the Federal Reserve.
The ANZ bank said the New Zealand and Australian dollars had gone sharply lower as risk appetites disappeared, leading to liquidation of carry trades, where investors borrow low interest rate currencies such as the yen to buy higher yielding investments.
Markets were taking a dim view of the announcement last week of plans by major central banks to provide liquidity to the banking system, ANZ said.
The NZ dollar looked set to this week trade off US equities again, a key barometer of risk.
The kiwi opened down across the board today, buying 0.5305 euro at 8am from 0.5363 at 5pm on Friday, and at 86.64 yen from 88.25.
Against the Australian dollar the kiwi was down to A$88.93c at 8am from A$89.35c on Friday evening. The trade weighted index was 71.73 when the local market opened today from 72.87 at Friday's local close.
- NZPA
