The New Zealand dollar eased slightly today as equity markets weakened on renewed fears about the strength of European banks.By 5pm, the NZ dollar was buying 71.70USc from 71.94USc at 8am and 72.32USc at 5pm yesterday. It fell to 78.56Ac at 5pm from 78.94
The New Zealand dollar eased slightly today as equity markets weakened on renewed fears about the strength of European banks.
By 5pm, the NZ dollar was buying 71.70USc from 71.94USc at 8am and 72.32USc at 5pm yesterday.
It fell to 78.56Ac at 5pm from 78.94Ac at 8am and 79.10Ac yesterday.
"We have drifted off against the aussie and other currencies. We were probably too high on opening," one dealer said.
There was no local economic data of note to move the markets so investors focused on equity markets, which were rattled by a Wall Street Journal report that said stress tests published more than a month ago underestimated some lenders' holdings of potentially risky government debt.
However, shortly before the local session ended, the Treasury revealed that the cost of the earthquake in Christchurch could be as high as $4 billion, double the original estimate.
The Australian dollar performed better and was underpinned by gains on a battered euro. The euro struggled near record lows.
The Australian dollar was not affected by data which showed the number of mortgage commitments rising 1.7% in July, much as expected.
The Australian dollar was at 91.25USc at 5pm from 90.45USc at the same time yesterday.
BNZ market strategist Mike Jones said when Julia Gillard was announced as prime minister, the knee-jerk response was to sell the aussie, but the losses were relatively short-lived.
Mr Jones said it "recovered some of its losses with the reduced political uncertainty and yesterday's marginally more hawkish than expected Reserve Bank of Australia statement no doubt providing some support."
The RBA left rates on hold at 4.5% as expected, as inflation posed few problems and the global outlook remained uncertain.
Against the "safe-haven" yen, the NZ dollar also dropped to ¥59.82 at 5pm today from ¥60.83 at the same time yesterday. It was little changed at €0.5641 from €0.5652 yesterday.
The trade weighted index fell to 66.73 at 5pm from 67.21.
