Kiwi dollar zooms back overnight

The New Zealand dollar fell sharply against the greenback overnight in the wake of a slide in the Shanghai stockmarket, but then zoomed up out of its hole.

By 8am today the kiwi was buying US67.44c, having dipped to around US66.65c shortly after midnight, from US67.57c at 5pm yesterday.

In its morning briefing notes, ANZ bank said the Shanghai stockmarket's 4.3 per cent fall yesterday triggered a bout of risk aversion that saw the NZ dollar head sharply lower.

"However, sentiment just as quickly turned around, and with it came buying support for the NZD," ANZ said.

US equities had once again provided the lead for currencies, with the NZ dollar lifting as negative sentiment towards the greenback increased.

The NZ dollar showed less resilience against other key currencies, falling to 0.4738 euro at 8am from 0.4775 at 5pm, and was down to 63.39 yen from 63.92.

Against the Australian dollar, the kiwi fell to A81.35c at the local open from A81.48c, while the trade weighted index fell to 62.79 at 8am from 63.09 at the local close.

The US dollar fell against the euro, yen and a basket of currencies.

A rebound on Wall Street reduced safe-haven demand for the US currency, while a jump of more than 4 per cent in oil prices lifted commodity currencies.

Comments from billionaire investor Warren Buffett were also thought to have weighed on the US dollar.

Writing in The New York Times, Buffett warned that the "gusher of federal money" aimed at rescuing the US economy will in the long run undermine the US dollar.

- NZPA