NZ Dollar: Kiwi stabilises on US dollar weakness

The New Zealand dollar stabilised overnight, after rebounding a little off its lows against the greenback.

Around 8am the kiwi was buying US56.09c, having climbed from US55.73c at 5pm yesterday.

BNZ Capital currency strategist Danica Hampton said the story was largely one of US dollar weakness.

"Effectively it's a US dollar story. We have seen glimmers of hope from euro zone data ... and also we saw some glimmers of hope from the banking sector again," she said.

The NZ dollar spent the 24 hours to about 8am consolidating within a US55c to US56.25c range.

The euro rallied broadly on the encouraging news about the European economy and banking system, which sparked hope that the 16-country euro zone may be emerging from the depths of recession.

The US dollar was also weakened slightly by data showing a 3 per cent slide last month in the pace of existing US home sales.

The NZ dollar slipped to 0.4270 euro at the local open from 0.4285 at 5pm, with the kiwi also down to A78.54c against the Australian dollar at 8am from A78.85c at yesterday's local close.

The kiwi did gain against the Japanese currency to 54.92 yen from 54.50, while the trade weighted index rose to 55.91 around 8am from 55.83 yesterday evening.

- NZPA