The New Zealand dollar was struggling to hold on to the US73c level when the local market opened today, having dropped to a six-month low against the greenback at about US72.65c earlier in the overnight session.
The New Zealand dollar was struggling to hold on to the US73c level when the local market opened today, having dropped to a six-month low against the greenback at about US72.65c earlier in the overnight session.
At 8am today the kiwi was buying US73.01c, slightly down from its level at 5pm yesterday, and was down to 59.04 yen from 59.55.
The Japanese currency jumped against higher-yielding currencies as investors sold riskier assets on fears of slowing Asian economic growth in the wake of the Japanese earthquake, tsunami and nuclear crisis.
Safer currencies such as the Swiss franc and US dollar found support from hedge funds and Japanese retail investors while stocks and commodity prices fell sharply.
While Japan's economy will suffer because of the recent catastrophe, other economies that were relying on accelerating global growth will suffer more.
The higher-yielding Australian dollar fell more than 2 percent against the US dollar, while the Canadian dollar also tumbled.
BNZ currency strategist Mike Jones said the aussie had tended to bear more of the brunt of investors' generalised flight to safety. Not only was Australia regarded as more highly exposed to Japan, but expectations of a rate hike across the Tasman had taken a sizeable knock yesterday.
The US dollar held steady against the euro and yen after the US Federal Reserve maintained its ultra-loose monetary policy.
About 7.15am (NZT) the US central bank said the economy was gaining traction but flagged potential inflation risks from costlier energy and food.
The NZ dollar was at an 11-month low 0.5218 euro at 8am, down from 0.5255 euro at 5pm, while strengthening against the aussie to A73.73c from A73.40c. The trade weighted index fell to 64.51 at 8am from 64.67 at 5pm.
