NZ dollar falls below US70c

The New Zealand dollar opened weaker this morning after lower risk appetite saw the currency dip to 2-1/2 month lows below US69.50c overnight.

By 8am today, the NZ dollar was buying US69.73, slightly better than about US69.20c overnight, but weaker compared to US70.75 at 5pm yesterday.

BNZ market strategist Mike Jones said that in an abrupt change of recent fortunes, the NZ dollar had been the weakest performing currency over the past 24 hours.

"Sharply lower appetite for risk weighed on the NZD/USD last night," he said in a market commentary.

"Risk appetite was dragged lower by a couple of factors. First, investors are nervous China may take additional steps to slow Chinese demand following comments from Chinese Premier Wen he would act 'decisively' to prevent a house price bubble in China. Second, markets are worried Europe's sovereign debt crisis could spread and derail the global economic recovery."

Against the euro, the kiwi dipped to 0.5627 at 8am from 0.5703 at 5pm yesterday.

The euro hit a four-year low against the US dollar in Asian trading yesterday, hurt by worries that spending cuts due to a bailout plan may choke off fragile recovery in the Eurozone.

ANZ, in its morning brief, said the NZ dollar is expected to spend the day in US69c territory as offshore markets squeeze the euro higher.

Local producers price index (PPI) data due today is likely to have little impact on the New Zealand dollar moves today, ANZ said.

Against the Australian dollar, the NZ dollar weakened to A79.48c at 8am, from A79.92c at 5pm yesterday.

The trade weighted index fell to 67.20 from 67.71 yesterday.

- NZPA