NZ dollar falls back from US72c

The New Zealand dollar failed to break a US72 cent barrier overnight.

At 5pm yesterday the NZ dollar was buying US71.08c. Overnight it reached a high of US71.98c about midnight but tailed off after that to level out at US71.29c at 8am today.

The ANZ, in its morning brief, said the dollar's weakness evolved from the weakening Australian and European currencies as cross levels remained unchanged.

Overnight failed attempts to move back above US72c instilled confidence in sellers, helping the move lower.

Further weakness for NZ dollar were expected today given moves offshore in euro and Australian dollar, the bank said.

The kiwi was down slightly against the Australian dollar to A79.85c at 8am today, from A79.95c at 5pm yesterday.

It rose to 0.5646 euro from 0.5635, lifted to 66.42 Japanese yen from 65.77 and was also up against the British pound, to 48.07p from 47.80p.

The trade weighted index rose to 68.00 from 67.84.

In overseas exchanges the euro fell against the US dollar on Wednesday, erasing early gains as worries about euro zone growth outweighed new Spanish spending cuts and a successful bond sale in Portugal.

The euro retreated to US$1.2630, down 0.2 per cent, after rising to US$1.2739. Analysts said the market was still worried about whether weaker euro zone economies would deliver on promises to trim their deficits, as well as the long-term impact of austerity measures on European growth.

Sterling fell 0.8 per cent to US$1.4825 after the Bank of England said UK inflation will fall below 2 per cent even if interest rates remained at their current record low.

- NZPA