9 Sep 2008

NZ dollar retreats

8:33 pm on 9 September 2008

The New Zealand dollar on Tuesday gave up most of the gains it made following the news the United States government will bail out troubled mortgage giants Fannie Mae and Freddie Mac.

The New Zealand dollar reacted on Monday by leaping more than 1.5 cents to about US68.5c, but retreated overnight and at 5.20pm on Tuesday was trading at US66.3c.

Markets in New Zealand, Australia and most of Asia rallied on the news on Monday, while Wall Street and European markets followed suit.

RBC Capital Markets senior currency strategist Sue Trinh says the reversal is the result of a reassessment that the bailout has little significance for the foreign exchange market.