NZ dollar loses steam

Photo / Dean Purcell

The New Zealand dollar pushed up in early morning trade but then lost steam and returned to earlier levels.

Around 8am the kiwi was buying US70.37c, little changed from US70.29c at 5pm, having peaked around US70.90c about 2am.

BNZ markets strategist Mike Jones said a shaky improvement in investors' risk appetite was the major theme of the night.

That mostly related to the lack of any further "bad" news about the global economy.

United States weekly jobless claims were not quite as weak as feared, German consumer confidence edged higher and a strong Irish debt auction kept European sovereign debt fears at bay, Jones said.

Easing risk aversion saw investors take profit on safe-haven positions in currencies such as the yen and greenback last night.

Exposures to growth-sensitive currencies such as the NZ and Australian dollars rose accordingly.

But the NZ dollar's gains were limited, with the mood in US markets still fairly sombre and US equities ended lower.

The NZ dollar slipped to 59.38 yen around 8am from 59.53 at 5pm yesterday, and was little changed around the local open at 0.5529 euro and A79.31c against the Australian dollar.

The trade weighted index was 65.90 at 8am from 65.95 at 5pm.

Investors are now braced for Federal Reserve Chairman Ben Bernanke's speech tonight at an annual Federal Reserve gathering in Jackson Hole, Wyoming

- NZPA