Kiwi recovers from earlier losses

Last updated 18:53 22/06/2012

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The New Zealand dollar was up against the greenback today, recovering from earlier losses after an aggressive overnight sell off.

Several leading United States banks and investment banks were downgraded by ratings agency Moodys and US factory data showed manufacturing slowed to an 11 month low while in Europe, German data showed factory activity had plummeted to a three year low.

The kiwi recently traded at US78.79c, up from US78.64c in the morning. On the trade weighted index of major trading partners' currencies, it was at 71.60, up from 71.53 earlier.

BNZ market strategist Mike Jones said the kiwi had done very little today following the aggressive sell off overnight.

"The currency shuffled sideways in a very narrow range, licking its wounds. We've seen fear and loathing return with the downgrades of US banks and generalised worries about the global economy which has seen investors take a more cautious approach to risk assets," Jones said.

"We just saw a little bit of profit taking to close out the week with the New Zealand dollar pausing for breath after a volatile week. I expect a quiet night ahead with more sideways consolidation but the big event everyone is looking forward to next week is the EU Summit."

On the crosses, the kiwi was at 78.34 Australian cents, down from A78.40c earlier. It was at 63.29 Japanese yen, down from 63.20 yen previously. It was at 62.75 euro cents, up from 62.74 euro cents earlier. It declined to 50.46 pence from 50.47 pence previously.

The kiwi may trade between US78.40c and US79.20c overnight with a bias towards the downside.

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