NZ Dollar: Kiwi falls to week low against greenback

The New Zealand dollar fell to its lowest level in a week against the greenback as persistent worries about world economic prospects led to rises in the currencies of the United States and Japan.

By 8am today the kiwi was buying US58.42c, having dropped to near US58.30c in the preceding hour, from US59.30c at 5pm on Friday.

The yen, in particular, benefited from investors' desire to seek shelter . Analysts said the yen's performance suggested Japanese investors were looking toward their domestic markets.

The kiwi dropped to a fortnight-low against the Japanese currency, falling to 55.42 yen by the local open from 56.85 yen at 5pm on Friday.

Investors were mainly discouraged by reports showing the euro-zone economy contracted at its fastest pace on record.

Data showed the euro-zone economy shrank 2.5 per cent in the first quarter from the previous quarter and 4.6 per cent from the same period a year ago, driven by a plunge in German output.

More positive data for the US economy such as a modest drop in industrial production for April and a rise in consumer confidence were not enough to shake the market's bearish stance on risky trades in higher-yielding currencies such as Australian and NZ dollars.

The kiwi was slightly lower at 0.4337 euro by 8am today from 0.4346 at Friday's local close, and was little changed against the Australian dollar at A78.10c by the local open. The trade weighted index was 56.85 at 8am today from 57.38 at 5pm on Friday.

- NZPA