The New Zealand dollar pared some of its overnight losses against the greenback as risk aversion eased slightly in Asian trading although investors remain jittery about a possible global trade war.
The kiwi dollar traded at US72.26c this afternoon from US72.17c at 8am and US72.34c late yesterday. The trade-weighted index was at 74.20 from 74.19.
The kiwi eased overnight after China retaliated over US tariffs, sapping risk appetite. US equity markets also sold off sharply as China said it would impose tariffs of up to 25 per cent on a list of 128 products imported from the US.
ANZ Bank New Zealand chief economist Sharon Zollner said "it wasn't surprising overnight to see the New Zealand dollar take a bit of a hit. We have been saying for quite some time that its vulnerable to a bit of a turn in global liquidity and more generally in risk aversion and we did see a risk-off move", she said.
She said it has bounced back a bit in Asian trading "consistent with a bit of a bounce in US equity futures, as some may see the move as a bit overdone".