KEY POINTS:
The New Zealand dollar lost traction against all its major trading partners today, as another fall on Wall St and strong Australian data conspired against it.
Murray Hindley, chief foreign exchange dealer at ANZ Institutional Bank, said trading had been "quite whippy" as investors alternated between ris k aversion and New Zealand's strong yield and commodity price story.
"It's been quite busy today. Obviously with stronger Aussie retail sales data, we've seen a strengthening of the Aussie against the kiwi dollar, and the morning session was pretty much all on the selloff of the US equity markets."
The New Zealand dollar struggled against the Australian dollar, closing at A87.17c (A87.82c yesterday), as strong retail sales increased expectations for interest rate rises as early as February.
The kiwi also came under pressure from Wall St, slipping down from an opening high of US77.32c to a close of US76.78c, compared with US77.10c yesterday.
Moves on equity markets are seen as a barometer for the carry trades, which borrow in low-yielding currencies like the yen and invest in high yielding but riskier currencies like the kiwi and Australian dollars.
The NZ dollar slipped to 83.73 yen from 84.30 yen yesterday, and to 0.5217 euro (0.5242 euro).
The US dollar edged up 0.1 per cent to 109.05 yen, pulling away from a six-week low of 107.90 yen on Friday.
The euro was virtually steady from late US trading on Tuesday at $1.4717.
Reuters currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US76.78 US77.10c
NZ dlr/Aust dlr A87.17c A87.82c
NZ dlr/euro 0.5217 0.5242
NZ dlr/yen 83.73 84.30
NZ dlr/stg 38.89p 39.10p
NZ TWI 70.96 71.38
Australian dollar US88.07c US87.82c
Euro/US dollar 1.4717 1.4710
US dollar/yen 109.05 109.34
- NZPA