Kiwi dollar loses ground

The New Zealand dollar trended lower yesterday and overnight against the greenback, from a three-week high reached early yesterday.

After spiking to around US75.20c about 8.15am yesterday, the kiwi was down to US74.69c at 5pm yesterday, then slipped further through the night to US74.49c by 8am today.

The move lower by the NZ dollar came as the greenback rebounded broadly after Federal Reserve chairman Ben Bernanke's rare comments on the United States currency spurred traders to trim long-term bets against the US dollar.

Mr Bernanke surprised investors when he said the central bank was "attentive to implications of changes in the value of the (US) dollar," although he reiterated that interest rates would remain exceptionally low for an "extended period".

Some took his remarks on the US dollar, which is usually the purview of Treasury, to mean the Fed fears depreciation could stoke inflation.

Despite falling against the greenback, the NZ dollar edged up to a three-week high against the European currency getting to 0.5016 euro early today, according to Reuters data. By 8am the kiwi was at 0.5012 euro from 0.4995 at 5pm.

Against the Australian dollar the kiwi reached a fortnight high of A80.37c around 10.30pm, from A80.01c at 5pm. By the local open the NZ dollar was at A80.14c.

The NZ dollar was also at 66.44 yen by 8am, little changed from the local close. The trade weighted index was 66.34 at 8am from 66.37 at 5pm.

- NZPA