KEY POINTS:
The New Zealand dollar is down against the euro and yen but is holding its own with the Australian and United States dollars.
The greenback fell against the euro as an unexpected surge in the US jobless rate revived fears of a deeper and more prolonged economic downturn, diminishing the prospects of Federal Reserve interest rate hikes by year-end.
At the same time, European Central Bank officials appeared to leave little doubt that euro zone rates were set to rise next month, helping to set up the US dollar for its worst weekly loss versus the euro since late March.
The ANZ bank today said the euro was lifted by default against the greenback. The NZ dollar had failed to follow, delivering the lower value of the kiwi against the European currency.
By 8am today the NZ dollar was buying 0.4868 euro from 0.4926 at 5pm on Friday. Against the yen, the kiwi was down to 80.49 at the local open from 81.42.
The NZ dollar was little changed against the greenback, at US76.88c from US76.74c at Friday's local close.
The story was similar against the Australian dollar, with the NZ dollar buying A79.92c at 8am from A79.84c. The trade weighted index was 68.20 at 8am today from 68.50.
Bank of New Zealand currency strategist Danica Hampton said the NZ dollar was the worst performing currency last week, falling 1.8 per cent against the greenback, nearly 3 per cent against the aussie and about 2 per cent on a trade weighted basis.
The reasons for NZ dollar weakness were obvious, with the Reserve Bank revising its growth projections significantly lower and making its easing bias explicit.
- NZPA