The New Zealand dollar fell to its lowest level in three weeks today but the Australian dollar got a lift late in the session from reports of a deal on the controversial mining tax.
Murray Hindley, chief foreign exchange dealer at ANZ, said the session was choppy, with Asian equity markets weak after late sell off in the US equity market.
Reuters reported that Asian stock and commodity markets declined after manufacturing data showed China's rapid growth was slowing.
The NZ dollar was 68.10USc at 5pm, down from 68.59USc around 8am, and sharply lower than the 69.24USc at 5pm yesterday.
The currency has fallen from 71.50USc on Saturday.
The Australian dollar was also sharply lower but it found support this afternoon after the Sydney Morning Herald reported that BHP Billiton, Rio Tinto and Xstrata had agreed with the government on the key elements of a new resources tax structure.
Mr Hindley said the Australian dollar lifted about 30 points on reports of a mining deal.
Earlier, Australian retail sales data for May was in line with expectations.
The euro fell to an all-time low against the Swiss franc after China's official purchasing managers' index fell to 52.1 in June from 53.9 in May, which was weaker than investors were expecting. This made investors wary of risk again.
Against the European currency, the NZ dollar was at €0.5575 at 5pm from €0.5670 at the same time yesterday.
The euro had earlier firmed across the board after banks borrowed less money than expected from the European Central Bank, soothing concerns over European banks' funding issues.
BNZ strategist Mike Jones said market sentiment appeared to stabilise last night but remained fairly fragile, with investors reluctant to take positions ahead of significant event risk of coming days.
As a consequence growth-sensitive currencies, such as the NZ dollar, tended to underperform, Mr Jones said.
A slate of global data releases tonight would provide an important cross-check on the strength of the global upturn. Any hint of further softness would knock back risk appetite, and the NZ dollar against the greenback, even further.
The NZ dollar is also around three-week lows against the yen and fell to ¥60.10 at 5pm from ¥60.63 at 8am and ¥61.37 yesterday.
It was mixed against the Australian dollar at 81.47Ac at 5pm compared with 81.53Ac at 8am and 81.32Ac at yesterday's local close.
The trade weighted index was 66.00 from 66.84 at the same time yesterday.