KEY POINTS:
The New Zealand dollar fell through much of the night, dropping more than 1-1/2c against the greenback to US66.50c early today before starting to regain some of the lost ground.
By 8am the kiwi was buying US67.18c, still 1c below its level at 5pm yesterday, having risen sharply early yesterday in reaction to the United States government bailout of mortgage finance companies Fannie Mae and Freddie Mac.
The ANZ bank said yesterday's US dollar weakness was completely reversed in overnight trading. Greenback moves dominated price action and would do so again today.
The NZ and Australian dollars had also given back gains against the yen, ANZ said.
The US dollar rallied to a one-year peak against a basket of currencies as the bailout boosted confidence in the US financial sector.
The move also prompted investors to wade back into risky trades, by buying higher-yielding currencies and selling the yen.
By 8am the NZ dollar had also regained some of the ground lost to the Japanese currency during much of the night, but at 72.61 yen was still well below the 74.20 yen at yesterday's local close.
In contrast, the kiwi gained a little against the European currency overnight, opening locally today at 0.4749 euro from 0.4732 at 5pm.
The NZ dollar also edged up on its Australian counterpart, to A82.19c by 8am from A82.06c. The trade weighted index slipped to 64.11 at 8am from 64.55.
- NZPA