NZ dollar falls

The New Zealand dollar fell out of favour with investors today after Federal Reserve chairman Ben Bernanke expressed concern about the United States economy, but managed to rally off lows late in the session.

Mr Bernanke, in testimony prepared for delivery to the Senate Banking Committee, said the US economy faced "unusually uncertain" prospects and that the central bank was ready to take further steps to bolster growth if needed.

While Mr Bernanke left the door open to additional stimulus steps, he said nothing would happen in the near term. The dollar slid against the yen and US equity prices fell.

The NZ dollar fell as low as US70.95c today from US71.60c at 5pm yesterday. It fell from around US71.80c to US71.30c within about 10 minutes of Mr Benanke's comments but rallied late in the session to be US71.32c at 5pm.

Mr Bernanke's official statement contained no surprises but the market was in a pessimistic mood and focused on the negatives, said Imre Speizer, senior market strategist at Westpac.

During a question and answer session Mr Bernanke outlined potential new stimulus measures and investors chose to worry that he was so explicit about possible measures.

Investors also remain nervous ahead of the release of stress-test reports by European banks and regulators at 4am NZ time on Saturday.

The NZ dollar also fell against the yen to be 61.64 yen at 5pm from 62.65 yen yesterday.

It was 0.5580 euro from 0.5555 yesterday and was A81.31c from A81.16c yesterday.

The trade weighted index was 67.26 at 5pm from 67.31 yesterday.

- NZPA