NZ dollar hits stumbling block

The New Zealand fell away overnight Friday as worries about the global outlook saw investors sell growth-sensitive currencies such as the kiwi in favour of the relative safety of the greenback.

By 8am today the NZ dollar had fallen to US70.83c from US71.52c at 5pm on Friday.

BNZ senior strategist Danica Hampton said that after performing strongly for much of last week, the NZ dollar hit a stumbling block on Friday night.

A surprise tightening by the Bank of India raised fears that central banks from other emerging economies may soon follow suit and sparked fears about how the global economy would cope, Ms Hampton said.

The Bank of India decision took a toll on commodity prices, equities and risk appetite.

The NZ dollar skidded below US70.70c but rumoured sovereign demand for risk currencies, as well as fix related buyers helped lift the kiwi off its lows as the week drew to a close.

The NZ dollar fell to 0.5231 euro at 8am from 0.5248 at 5pm, and was down to 64.07 yen from 64.68.

Against the Australian dollar, the kiwi dropped to A77.38c at the local open from A77.56c at Friday's local close. The trade weighted index was down to 65.57 at 8am today from 65.93 at 5pm on Friday.

- NZPA