Currency: NZ dollar slips against greenback

The New Zealand dollar weakened against the greenback as optimism about a United States government plan to remove bad assets from banks' balance sheets dwindled.

That prompted investors to resume safe-haven bets on the US currency.

By 8am today the kiwi was buying US56.49c, having slipped from a 10-week high around US57.45c mid-afternoon yesterday.

ANZ bank said the failed attempt to move the NZ dollar above US57.50c was the appropriate precursor to the overnight dip. North American buyers had ensured the kiwi did not break lower.

Poor data later this week could mean further moves south for the kiwi.

Current account figures for the December quarter are due out tomorrow with gross domestic product figures on Friday.

The NZ dollar was at 0.4179 euro at the local open, similar to the level at 5pm yesterday, while it slipped to 55.27 yen from 55.77.

The kiwi was down just slightly against the Australian dollar to A80.72c by the local open, while the trade weighted index was 56.03 at 8am from 56.37 at 5pm.

Another reason the US dollar gained overnight was a growing view that the Federal Reserve's quantitative easing - buying US Treasury debt that would massively expand the US balance sheet - would not undermine the currency as many initially thought.

"We're seeing a pullback in (US) equities from yesterday's steep gains, and that has caused a pause in the selling of the (US) dollar. So, this is the risk-aversion theme once again," said Ken Landon, a currency strategist at JPMorgan Chase in New York.

- NZPA