What goes up, apparently, must come down.
The New Zealand dollar spent most of the overnight session below US74c, hitting a 10-week low around US73.65c, as investors continued to retreat from risky investments.
The latest step down in the value of the kiwi started around 3pm yesterday, when
the currency was buying around US74.60c, with the low point coming around 10pm. At 8am today the kiwi was buying US73.93c.
It stabilised overnight as central banks in the world's leading economies pumped extra money into the financial system for a third straight trading day, but in far smaller amounts as investor nerves steadied over the dangers of a credit squeeze.
The weak run of high-yielding currencies such as the NZ dollar and British pound continued as investors unwound carry trades where low-yielding currencies are borrowed and then sold to buy higher yielding assets.
The kiwi dipped from around 88.30 yen yesterday afternoon to a trough around 86.75 before partially recovering to be at 87.46 yen by 8am today.
Around 6.30pm yesterday the kiwi was at near five-month lows against the Australian dollar, around A87.50c. By 8am today it was at A87.78c.
The kiwi was also buying 0.5433 euro at 8am today from 0.5427 at 5pm yesterday. The trade weighted index was 71.24 this morning from 71.33.
- NZPA
