NZ dollar falls vs greenback and yen

The New Zealand dollar fell further against the greenback and yen from five-week highs reached earlier this week as investors turned risk averse.

Doubts persisted about China's move to make the yuan flexible and further worries arose about European banks' funding needs.

The Chinese yuan declined against the US dollar given heavy buying of the greenback by state-owned banks, which indicated the People's Bank of China was using new strategies to fuel two-way trades and limit the Asian currency's gains.

"(US) Dollar/yen is still reeling from the whole China story. I think the market hasn't figured out yet how much China will let the yuan appreciate," said Steven Butler, director of FX trading at Scotia Capital in New York.

Meanwhile, French bank Credit Agricole pushed back profit targets for its struggling Greek unit Emporiki and said it will take a 400 million euro ($696.5m) write-down as Greece fights its debt load.

Around 8am the NZ dollar was buying US70.49c and 63.75 yen, down from US70.79c and 64.39 yen at 5pm yesterday.

BNZ strategist Mike Jones said global stock markets also snapped their 10-day winning streak overnight, weighing on risk appetite and growth-sensitive currencies such as the NZ dollar.

Early today the kiwi climbed to its highest level against the euro in nearly three years, around 0.5775 euro, but by 8am had fallen to 0.5742, slightly down from its level at the local close.

The NZ dollar edged up against its trans-Tasman counterpart to A80.79c at the local open from A80.65c at 5pm yesterday, while the trade weighted index fell to 67.84 at 8am from 68.08 at 5pm yesterday.

- NZPA