KEY POINTS:
The New Zealand dollar dipped during the night but held around US50.10c, then strengthened during the early morning to above US51c by the local market open.
At 8am the kiwi was buying US51.10c, slightly above its level at 5pm yesterday, and well above the six-year low around US49.65c touched early yesterday.
BNZ currency strategist Danica Hampton said strong gains in the Australian dollar against the greenback had provided some support for the kiwi against the United States currency last night.
The aussie benefited from hopes yesterday's move to cut official Australian interest rates 100 basis points to 3.25 per cent, combined with the announcement of an additional A$42 billion ($53.7b) of fiscal spending would see the Australian economy ride through the global recession.
News that China and Japan were stepping up their fiscal stimulus plans also helped risk appetite, which triggered a bout of generalised US dollar weakness, Ms Hampton said.
The NZ dollar slipped against its Australian counterpart overnight to A78.92c by 8am from A79.57c at 5pm.
ANZ said a stronger Australian dollar should continue to see that cross ease lower, having failed to push above A80c yesterday.
The NZ dollar also edged down against the European and Japanese currencies to 0.3944 euro and 45.60 yen by the local open. The trade weighted index was down to 51.51 by 8am from 51.61 at 5pm.
The US dollar fell against the euro after an unexpected jump in US pending home sales in December, easing demand for the greenback as a haven.
The housing report "is a real shot in the arm for (risk) sentiment," said Brian Dolan, chief currency strategist at Forex.com, in New Jersey.
But gains in the euro were limited as many in the market stayed sidelined before the European Central Bank's rate decision later this week when it is widely expected to leave interest rates on hold at 2 per cent.
- NZPA