NZ dollar dives on rising euro worries
9:30 AM Wednesday Apr 28, 2010

The New Zealand dollar dived against the greenback and yen overnight as downgrades of the credit ratings of Greece and Portugal and worries aid for Greece could be blocked caused risk appetite to fall.

By 8am today the kiwi was buying US71.10c, having spiked above US72.50c, its highest level in three months, early Tuesday.

The NZ dollar also fell to 66.24 yen by the local open from 67.68 yen at 5pm on Tuesday.

BNZ strategist Mike Jones said that renewed fears about contagion from Greece's fiscal woes saw European borrowing costs and investors' appetite for risk take a clear turn for the worst, with equity prices slumping.

Against that backdrop, investors shunned high yielding or growth sensitive currencies such as the NZ dollar against the greenback, in favour of safe haven currencies such as the US dollar and yen, Jones said.

More here.