KEY POINTS:
The New Zealand dollar picked up today as the US dollar hit a record low.
It closed on US75.62c compared with its US75.20 opening and US76.46c at the same time yesterday.
Trading was quiet due to the Thanksgiving holiday in the US, but the greenback was sold again on a combination of worries about the subprime mortgage market, recession and easier US interest rates.
Aussie dollar traders mostly squared up ahead of tomorrow's election. While the opposition Labor Party is the front-runner to win, traders have not ruled out the incumbent Liberal Party coalition. A win by the Government would send the aussie racing higher while a Labor win has largely been priced in.
It closed on US87.64c from US87.36c yesterday while the kiwi cross dipped to A86.25c from A86.41c.
The US dollar hit new lows against the euro, the Swiss franc and a basket of currencies on growing belief the US Federal Reserve will cut interest rates again next month.
Adding to downward pressure on the dollar was a recovery in equity markets and a slight pick up in risk appetite which made investors more willing to put on riskier trades in high-yielding currencies like the kiwi and aussie.
The more risk-friendly mood also hit the yen, a favourite source of cheap funding for the carry trades based on interest rate differentials.
"No one really wants to bet against a fall in the dollar," said Niels Christensen, FX strategist at Nordea.
"Fears of recession or lower activity in the United States and strong expectations of rate cuts is driving the dollar down ... I am struggling to find any factor or event that could turn the tide with the dollar," he added.
Expectations for further US rate cuts were reinforced by the Fed's projection that economic growth will slow next year, even though the central bank adopted a reasonably hawkish tone and said that October's cut was a "close call".
The NZ dollar trade weighted index slipped to 69.31 from 69.42.
Reuters currency rates
5pm today 5pm yesterday
NZ dlr/US dlr US75.62c US75.46c
NZ dlr/Aust dlr A86.25c A86.41c
NZ dlr/euro 0.5060 0.5074
NZ dlr/yen 81.60 82.10
NZ dlr/stg 36.47p 36.53p
NZ TWI 69.31 69.42
Australian dollar US87.64c US87.36c
Euro/US dollar 1.4942 1.4870
US dollar/yen 107.89 108.84
- NZPA