KEY POINTS:
The New Zealand dollar held the US76c level after dipping below the figure for the first time in a month as investors continued to fret about plunging world equity markets and perceived risky assets such as the kiwi dollar.
The kiwi started its local session down at US75.75c, having fallen 4 per cent in a week. It had a look above US76c, reaching as far as US76.15c, before settling back at US75.99c at 5pm.
Sliding share markets are making investors risk averse and the kiwi dollar is seen as a risky, so when share markets tanked again today the kiwi dollar was never likely to go much higher.
But the kiwi dollar did manage to put some runs on against the Australian dollar when Australian producer price data came in below expectations. The data weakened the case for an interest rate rise in Australia.
By 5pm it was trading at A86.70c compared to A87.13c at 5pm on Friday. Against the US dollar, the Australian dollar was up to US87.66c from US87.44c at Friday's local close.
The focus is expected to turn to the direction of New Zealand interest rates with the Reserve Bank of New Zealand's first interest rate review of the year on Thursday. Economists are picking that there will be no change in the 8.25 per cent cash rate.
US stocks fell half a per cent on Friday as investors expressed disappointment at President George W Bush's proposed US$150 billion ($200 billion) package of tax cuts and other measures to shore up the economy.
The fall was nearly matched by the New Zealand market today though trading was reduced by the public holiday in Wellington.
The kiwi was bobbing along around a two-month low against the yen, buying 81.20 at 5pm against 81.57 on Friday at 5pm. The trade-weighted index was at 70.40 from 70.47 on Friday.
BNZ currency strategist Danica Hampton said global concerns were here to stay for a while longer, "and while the markets are hopeful that the Fed will cut (rates) aggressively at the next meeting, that probably won't change market sentiment".
Reuters currency rates:
5pm today 5pm Friday
NZ dlr/US dlr US75.99c US76.20c
NZ dlr/Aust dlr A86.70c A87.13c
NZ dlr/euro 0.5229 0.5206
NZ dlr/yen 81.20 81.57
NZ dlr/stg 38.94 38.70p
NZ TWI 70.40 70.47
Australian dollar US87.66c US87.44c
Euro/US dollar 1.4538 1.4639
US dollar/yen 106.86 107.03
- NZPA