Dollar opens week steady

The New Zealand dollar was little different this morning from its level at Friday's local close, apart from a modest gain against the yen.

By 8am the NZ dollar was buying US64.40c and 0.4566 euro, little or no different from 5pm on Friday, as traders identified an overall mood of caution.

"There's still an underlying tone of risk aversion looming. People don't feel comfortable with the economy," said Melvin Harris, strategist at Advanced Currency Markets in New York.

Mixed corporate earnings in the United States raised some concern about the economy and enhanced the greenback's safe-haven appeal, while US data showing construction of new homes rose in June helped ease some anxiety, capping US dollar gains.

The kiwi was at 60.71 yen at 8am today from 60.30 at 5pm on Friday, and eased slightly against the Australian dollar to A80.45c. The trade weighted index was 60.63 at 8am today from 60.58 at 5pm on Friday.

In its morning briefing notes, ANZ said bombings in Jakarta on Friday (NZT) could not take the NZ dollar lower last week, with good buying interest providing support.

With second tier data due this week, the market should have time to take stock and look for fresh leads.

BNZ Capital senior strategist Danica Hampton said the currency markets saw out last week with risk appetite still evident, after the sharp but short lived tumble when news of the Jakarta terrorist activity broke.

The NZ dollar spent Friday evening trading between US64.25c and US64.75c as the week came to a subdued close, said Hampton.

Improved investor appetite for high yield bonds and diversification into emerging markets that had been evident all week continued across most asset classes and markets.

- NZPA