NZ dollar down with return of risk aversion

The New Zealand dollar traded at levels not seen for about two weeks but finished the session off lows.

By 5pm yesterday, the NZ dollar was buying US72.66c, little changed from the US72.47c at 8am and down from US72.95c at 5pm on Friday. According to Reuters data, the NZ dollar briefly dipped below US72c yesterday and early on Saturday.

"The past two days have seen a resurgence in risk aversion globally, and the correction thesis is now back on the table," Westpac said.

The NZ dollar's rally since March peaked at US76.35c during October and investors are now wondering if there is a significant correction on its way or not.

This week there is little local data of note apart from the National Bank Business Outlook survey on Thursday.

The NZ dollar also fell to its lowest level in nearly three weeks against the yen and was at a two-week low against the euro.

The NZ dollar was at €0.4863 at 5pm, having dipped to 0.4848 during the weekend, from €0.4889 at Friday's local close.

The NZ dollar was 64.60 at 5pm, having briefly slipped below 64. It was at 64.86 at 5pm on Friday.

Against the Australian dollar, the NZ dollar was at A79c from A79.40c at 5pm on Friday. The trade weighted index dropped to 64.82 at 5pm from 65.12 at 5pm on Friday.

Many investors were wary of taking positions in risky currencies ahead of the end of the month and the US Thanksgiving holiday on Friday.

- NZPA