KEY POINTS:
The New Zealand dollar fell against all major currencies, pressured by a combination of falling equity markets and escalating risk aversion.
By 5pm today the kiwi was buying US79.50c from US80.26c at 5pm yesterday, having peaked overnight above US80.45c.
Equity markets tumbled around the world as more finance houses reported losses. Australia's market was down over 3 per cent as the local market closed as fallout from the credit crunch moved closer to home.
The kiwi has been sold this year when equity markets tumble as investors shun risky assets.
During the night both the European Central Bank and the Bank of England kept their official interest rates unchanged.
Those decisions followed that of the Reserve Bank in this country, which yesterday left the Official Cash Rate at 8.25 per cent, and indicated that interest rates were not likely to start falling until the second half of next year.
The US dollar fell to lifetime lows against the euro after the ECB downplayed prospects of an interest rate cut and did not voice concerns about the single currency's sharp rally.
News that US home foreclosures rose to record highs in the fourth quarter also added to bearish investor sentiment toward the greenback, helping to push the dollar to historic troughs versus a basket of currencies and the Swiss franc.
The euro jumped to US$1.5378, its highest level since its launch in 1999, according to Reuters data.
Bank of New Zealand currency strategist Danica Hampton said initially the kiwi was bolstered by the broadly weaker greenback but fell back as renewed credit concerns came into focus, she said.
The kiwi fell to a six-week low against the euro of 0.5172 euros against 0.5255 at 5pm yesterday. It was also down to 81.70 yen from 83.43.
Against the Australian dollar, the kiwi fell to A85.63c from A85.89c, while the trade weighted index was down to 71.21 from 72.08.
CURRENCY RATES AT 5PM
Wellington, March 7 NZPA - Reuters currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US79.50c US80.26c
NZ dlr/Aust dlr A85.63c A85.89c
NZ dlr/euro 0.5172 0.5255
NZ dlr/yen 81.70 83.43
NZ dlr/stg 39.52p 40.33p
NZ TWI 71.21 72.08
Australian dollar US92.83 US93.43
Euro/US dollar 1.5370 1.5271
US dollar/yen 102.79 103.94
- NZPA
