Variable night for NZ dollar

The New Zealand dollar bounced around in a narrow range for much of the night, affected by a lower euro and easing business confidence in this country.

Around 8am the NZ dollar was buying US70.90c against the euro, having traded between about US70.65c and US71.05c since 8pm, after topping US71.50c yesterday morning.

In its morning briefing, ANZ bank said that following another G20 summit markets were back to trying to figure out how the global recovery story would pan out in the second half of the year.

Price action in global markets overnight was somewhat confusing, with European equities stronger across the board, yet the euro was getting hit and dragging the NZ and Australian dollars down with it.

Partly the euro's weakness was due to a rise in the Swiss franc which followed a newspaper story that quoted a Swiss National Bank board member saying deflationary risks had disappeared and Swiss exports had proven to be robust despite a stronger currency.

European banks having to repay 442 billion euros to the European Central Bank this week for funds borrowed a year ago, leaving a potential liquidity shortfall may also be weighing on the euro, ANZ said.

Amid all that, US bond prices continued to benefit from safe haven demand.

"What is clear is that investors lack any conviction and we are set for ongoing volatility and choppy price action as investors switch in and out of asset classes, with the NZD getting caught up in the midst," ANZ said.

Easing business confidence had added to the NZ dollar's woes.

The National Bank business outlook survey published yesterday showed the number of respondents expecting general business conditions to improve over the year ahead falling 8 points from May to a net 40 percent.

The NZ dollar rose to 0.5778 euro at 8am from 0.5742 at 5pm yesterday, but slipped to 63.39 yen from 63.60.

Against the Australian dollar, the kiwi was little changed at A81.26c by the local open, with the trade weighted index also changing little from its 5pm level of 68.05 to be at 68.07 at 8am.