Currency: Dollar rebounds overnight

The New Zealand dollar dipped overnight against the major currencies but then regained the lost ground to be a little stronger at the local open than at the local close yesterday.

By 8am the kiwi was buying US70.62c from US70.46c at 5pm, having dipped to around US70.05c at its lowest point during the night.

In its morning briefing, ANZ said that despite the inability of offshore markets to drive the NZ dollar higher yesterday, the currency had maintained reasonable poise, finding support in the offshore session.

"Widespread demand ensured it was lifted from the lows to start this morning relatively unchanged from yesterday," ANZ said.

The NZ dollar had fallen back into a familiar range between US70.20c and US70.90c and was likely to remain within that today.

The NZ dollar was up to 65.92 yen at 8am from 65.65 at 5pm, and by the local open was at 0.5289 euro, marginally up from the local close level.

Against the Australian dollar the kiwi edged up to A76.09c at 8am from A75.91c at the local close, after falling earlier yesterday afternoon as the aussie was boosted by firm employment data. The trade weighted index rose to 65.68 at 8am from 65.61 at 5pm.

The euro approached a 2010 low against the greenback but rebounded after the head of the European Central Bank assured markets that Greece was in no danger of defaulting on its debt.

The yen, meanwhile, relinquished earlier gains after ECB President Jean-Claude Trichet's reassurance on Greece eased risk aversion, while a news report fed speculation that China may be gearing up to revalue the yuan.

BNZ strategist Mike Jones pointed to both Trichet's comments and the yuan speculation as factors behind the NZ dollar's recovery against the US dollar.

Speculation that China might abandon the yuan's peg to the US dollar supported demand for growth-sensitive currencies such as the kiwi and aussie, Jones said.

- NZPA