The kiwi dollar had a volatile 24 hours in the wake of the London bombing but, as the shockwaves subsided, resumed its slide.
It fell to US66.88c this afternoon having briefly traded up above US68c shortly after news of the bomb blasts broke last night.
The news triggered a flight to safe haven currencies like the Swiss franc and treasury bonds, and the kiwi briefly benefited.
"The events of last night caused considerable volatility across financial markets generally," said BNZ chief dealer Mike Symonds. "But once the dust had settled, markets returned to levels pre the chilling news out of London last night."
He said the same drivers that influenced the kiwi in the early part of the week -- concerns about the deteriorating growth rate, weaker data, strength in the US dollar and the softening bias for commodities -- were to the fore.
The kiwi closed today at US67.08c against US67.03c at 5pm yesterday.
Mr Symonds said markets had been shaken by news of the terrorist attacks.
"There was uncertainty about what was happening and what had caused the explosions and markets reacted accordingly with a flight to quality and safe haven currencies."
"Once things became clearer, and the extent of the shocking news became evident, then markets recovered across the board."
He said it was quite surprising how quickly markets had recovered.
Traders said there was nothing to suggest the underlying fundamental situation had changed for the kiwi.
"We see sentiment in the New Zealand dollar as so damaged currently that investors will be cautious about creating new longs even though the interest rate pick up remains firmly attractive." said BNZ currency strategist Sue Trinh.
This evening in Wellington, the US dollar was buying 112.31 yen (112.23 at 5pm yesterday), while the euro was at US$1.1935 (US$1.925) and the aussie at US73.85c (US73.93c).
On its crosses, the kiwi was buying 38.51 British pence (38.29), 0.5622 euro (0.5619), 0.8718 Swiss francs (0.8737) and 75.34 yen (75.21).
The TWI closed at 68.62 (68.51) and the monetary conditions index at plus 923 (914).
On the money markets, 90-day bank bill yields were at 7.04 per cent (7.03), July 2009 bond yields were at 5.87 per cent (5.92), and the April 2015s were flat at 5.76 per cent (5.81 per cent).
- NZPA
<EM>Currency:</EM> Kiwi resumes slide as London shockwaves subside
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