KEY POINTS:
It was a whippy day for the New Zealand dollar which ranged about a cent against the US dollar as investor aversion to risk continues.
The kiwi dollar closed on its lows of US75.43c against a session high of US76.40c and a Friday close of US77.68c.
ANZ Investment Bank senior dealer Mark Elliott said trading was "very nervous" with stock markets down and further unwinding of carry trades - trades in high-yielding currencies like the kiwi funded by low-yielding currencies like the yen.
Today all currencies were on the back foot against the yen as it rose in reaction to a softer US dollar.
The kiwi-yen cross was at 83.03 yen compared to 87.40 yen on Friday and the greenback was buying 110.08 yen (112.53 yen). It hit an 18-month low of 109.85 yen on fears of more credit-related losses at financial firms.
The Australian dollar was also soft, and the kiwi held its ground against it, closing at A84.29c (A83.76c on Friday).
The trade-weighted index dropped to 69.47 from 71.16.
The BNZ's Danica Hampton said the kiwi was unlikely to benefit from a widening gap between the high New Zealand interest rates and falling US rates, while risk appetite remained muted and global equities remained weak.
Assuming the risk-aversion eventually settled down, the kiwi-greenback was unlikely to sustain its current level below 76c, and could well get back up to US78c, she said.
But in the meantime, the kiwi dollar could fall back tonight to US75c or even US74.50c as US markets close for a public holiday, Mr Elliott said.
Reuters currency rates
5pm today 5pm Friday
NZ dlr/US dlr US75.43c US77.68c
NZ dlr/Aust dlr A84.29c A83.76c
NZ dlr/euro 0.5154 0.5284
NZ dlr/yen 83.03 87.40
NZ dlr/stg 36.26p 37.81p
NZ TWI 69.47 71.16
Australian dollar US89.50c US92.71c
Euro/US dollar 1.4636 1.4703
US dollar/yen 110.08 112.53
- NZPA