NZ dollar hits 7-day low

The New Zealand dollar dropped to a week-low against the greenback early on Saturday, but recovered to be little changed from Friday's local close by 8am today.

As the United States dollar rose against most major currencies, the kiwi dropped from US71.16c at 5pm on Friday to a low around US70.65c, but by today's local open was back to US71.08c.

The NZ dollar edged up to 0.4961 euro at 8am today from 0.4944 at Friday's local close, and lifted to 64.29 yen from 63.72. Against the Australian dollar, the kiwi slipped to A79.81c at the local open from A80.04c at 5pm on Friday. The trade weighted index was 64.84 at 8am today from 64.77.

ANZ bank said expected tests of support had unfolded during the local and offshore sessions. Position squaring dominated moves but left the NZ dollar virtually unchanged from the open of the previous day.

With many offshore participants absent from the currency market from this week, erratic moves of the NZ dollar could be expected, ANZ said.

The rise in the US currency comes as investors who sold it for most of 2009 are buying it back as the year-end nears.

Signs of improvement in the US economy have helped the US dollar in recent days, as did the Federal Reserve's pledge last week to wind down most emergency lending by February, lifting hopes of a more robust US recovery in 2010.

- NZPA