NZ dollar tests US70c

The New Zealand dollar was more than a US cent lower than it had been on Friday today after investors again took fright and sold the euro to a four-year lows.

"Sovereign debt concerns continue to cast a shadow over the eurozone," ANZ said in a report. With increased talk of the demise of the euro, the NZ dollar and other currencies were dragged lower as investors spurned high-yielding currencies.

The NZ dollar was at US70.11c at 5pm from US70.75c at 8am and US71.37c at 5pm Friday.

It was firm against the falling euro, but remained below recent three-year high of 0.5721 euro, closing at 0.5703 euro from 0.5688 euro on Friday.

The euro extended its losses and hit a four-year low against the US dollar in Asian trading, hurt by persistent worries that spending cuts mandated by a bailout plan may choke off a fragile recovery in the euro zone.

ANZ expected the New Zealand government budget on Thursday to highlight the strong relative fiscal position it has compared to many countries.

"But where the euro goes this week, so too the NZ dollar - and that is increasingly looking down in the near term," ANZ said.

Against the Australian dollar, the NZ dollar rose to A79.92c at 5pm, from A79.56c at 5pm Friday.

It was 64.49 yen from 66.30 yen on Friday, and 48.88p against the British pound from 48.78 on Friday.

The trade weighted index fell to 67.71 from 68.20 Friday.

- NZPA