Kiwi dollar tumbles overnight

The New Zealand dollar tumbled through the night as investors were attracted to the greenback by its allure as a safe haven.

Earlier this morning the kiwi was at US57.47c as it continued retreating from the three-month high around US59.75c against the United States dollar on Monday afternoon. On its way down the NZ dollar passed through US58.27c at 5pm yesterday.

BNZ Capital currency strategist Danica Hampton said the NZ dollar fall against the greenback came amid weak global equities and a steady supply of the kiwi against the Australian dollar.

The Reserve Bank of Australia cut Australian interest rates 25 basis points to 3 per cent yesterday and reports suggested the RBA may be approaching the end of its easing cycle.

After yesterday's "seriously bad" Quarterly Survey of Business Opinion in this country BNZ continued to look for an eventual trough in New Zealand's official cash rate of 2 per cent, from 3 per cent now.

The contrasting outlooks for interest rate policy in this country and Australia encouraged selling of the NZ dollar against the aussie, Ms Hampton said.

The NZ dollar fell from a near three-month high against the aussie of about A83.10c on Monday night to A80.80c at today's local open.

The kiwi was also down to 57.64 yen at 8am from 58.65 at 5pm yesterday, and down to 0.4332 euro from 0.4355. The trade weighted index slid to 57.31 at 8am from 57.97 at 5pm.

The US dollar gained broadly as a drop in global stocks, ahead of the start of what is expected to be a weak corporate results season, boosted its attraction as a safe haven.

Data in Europe showing the euro zone economy recorded its deepest-ever quarterly fall in the fourth quarter of 2008, weighed on the euro.

- NZPA