The New Zealand dollar fluctuated in a range today but was generally lower.
After falling to US61.70c in the early hours of Tuesday morning the NZ dollar recovered but not to the levels prior to the plunge.
It was US62.47c at 5pm today from US63.25c at 5pm yesterday.Against a basket of currencies as measured by the trade weighted index it was at 61.23 from 62.00 yesterday.
Bank of New Zealand currency strategist Danica Hampton said the NZ dollar was in a consolidation phase and the market didn't pay a lot of attention to the National Party's economic policy release today because it was watching the larger issue of whether or not there was going to be a global recession.
"The NZ dollar started off a little heavy when US equity markets sold off hard into the close," she said.
Exporters were picking up cover on dips and that was providing support.
While risk aversion reigns, the NZ dollar is expected to remain under pressure.
The Reserve Bank of Australia's surprise 100 basis point interest rate cut has economists speculating that the Reserve Bank of New Zealand will move by the same amount, or at least 75 basis points on October 23.
Against the aussie, the NZ dollar was at A87.70c at 5pm from A87.57c yesterday.
The yen has been rising as it is viewed as a safe haven currency so the NZ dollar has been weak on that cross. It was 63.30 yen at 5pm from 65.04 yen at 5pm yesterday. Against a strong euro the NZ dollar fell to 0.4590 from 0.4656.
