NZ dollar pulls up from low

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The New Zealand dollar continued to pull away from yesterday's more than one-month low, recovering to above US71c as the US dollar gave back more of last week's gains.

By 5pm, the kiwi was buying US71.02c, up from US70.37c late yesterday afternoon and after dropping below US70c - briefly - for the first time in more than a month yesterday.

However, it was a touch weaker against the Australian dollar to A78.77c, from A78.96c late yesterday. The kiwi had fallen to a 3-1/2-month low of around A78.60c earlier today.

Concerns about the US economy's recovery and the global economy prompted investors to sell down the US dollar, which neared a fresh 15-year low against the Japanese yen today.

The greenback was at 85.32 yen this afternoon, down from 85.82 yesterday, and closing in on last week's low of 84.72 yen level.

In contrast, the NZ dollar rose to 60.60 yen from 60.39 yen. The kiwi also firmed to 0.5529 euro from 0.5501, and to 45.31 pence from 45.11p. As a result, the trade weighted index rose to 66.20 from 65.91.

BNZ markets strategist Mike Jones said that a plunge in global bond yields had boosted the relative yield advantage of the kiwi which, combined with a modest recovery in equity markets and risk appetite, helped the NZ dollar recoup earlier losses against the US currency.

Investors were awaiting a pile of US data, including July housing starts, which may indicate further weakness in the US economy, and in turn prompt another sell-off in shares. Data yesterday showed subdued regional manufacturing and plunging home building sentiment in the world's largest economy.

- NZPA