Currency: NZ dollar falls against $US

The New Zealand dollar dropped half a cent against the United States dollar overnight, as poor US consumer confidence data saw investors flock to the greenback.

The kiwi was worth US65.16c at 5pm yesterday but tumbled overnight to a low of US64.35c before recovering slightly to be worth US64.52c at 8am today.

The NZ dollar was also down against the Australian dollar to A80.08c from A80.52c yesterday, it dipped slightly to 0.4599 from 0.4619 against the euro and slipped to 62.15 from 62.39 against the Japanese yen.

It was little changed against the British pound, up 39.20p from 39.18p.

Yesterday an improvement in business sentiment in the National Bank Business Outlook survey made little impact on the kiwi.

The Reserve Bank also said that inflation was not currently considered a threat to the economy, but could return to the fore when the global economy recovered.

Overnight, the US dollar gained against a basket of currencies after a report showing an unexpected drop in US consumer confidence for June, prompting investors to seek shelter in the greenback.

Analysts also said the simultaneous end to the month, quarter and half year led to increased volatility in foreign exchange trading, exacerbating intraday moves in currencies.

These month-end and quarter-end flows have supported the dollar, though, analysts said, as investors sought to rebalance their portfolios.

In early afternoon trading in New York, the euro was last down 0.4 per cent at $1.4022 after trading as high as $1.4152 earlier, according to Reuters data.

Despite Tuesday's gains versus the euro, the dollar was still on track for its first quarterly drop against the single currency since the first quarter of 2008.

At the same time, an index measuring the value of the greenback against a basket of major currencies declined more than 6 per cent for the quarter, its first quarterly decline since the first three months of 2008. The index was up 0.4 per cent at 80.166.

The dollar also rose against the yen to 96.35.

- NZPA