KEY POINTS:
The New Zealand dollar took a major dive in mid-morning trade today but then quickly recovered much of its lost ground.
According to Reuters data it fell to US77.15c, its lowest point against the greenback in more than a week, having been near US77.90c around 8am. By 5pm the NZ dollar was buying around US77.55c.
Selling had accelerated after the market fell through option triggers around US77.40c, sparking stop-loss selling -- where the currency was sold automatically once it hit a certain level.
While remaining under pressure through the day as investors unwound carry trades, the kiwi was aided in its partial recovery by bargain hunters.
The pattern was similar against other currencies, with the kiwi hitting a two-week low of 93.45 against the yen at mid-morning, having been buying near 95 yen a few hours earlier. By around 5pm the NZ dollar had partly recovered to be at 94.38 yen.
Selling of the kiwi against the yen by Japanese accounts was seen to be the main driver behind the kiwi's fall against the Japanese currency.
Against the euro the low point was 0.5607 from 0.5671 at 8am, with the partial later recovery taking the kiwi to 0.5644 by 5am.
The low mark against the Australian dollar was A89.93c from A90.40c at 8am, with a return to A90.16c by 5pm.
The trade weighted index was 74.53 at 5pm from 74.84 at 8am.
The US dollar tumbled to a record low against the greenback on further bad news about subprime housing loans.
Markets were rattled by news that two leading rating agencies started to slash ratings for more than US$17.3 billion ($22.5 billion) of US mortgage-related debt, raising concerns that the sector's woes are worse than previously thought.
The greenback's broad decline accelerated early in the Asian session, including against the yen, as investors cut back their exposure to higher-yielding but riskier assets.
Reuters currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US77.55c US77.43c
NZ dlr/Aust dlr A90.16c A90.33c
NZ dlr/euro 0.5644 0.5693
NZ dlr/yen 94.38 95.54
NZ dlr/stg 38.28p 38.46p
NZ TWI 74.53 74.87
Australian dollar US86.01c US85.71c
Euro/US dollar 1.3738 1.3602
US dollar/yen 121.71 123.37
- NZPA