The New Zealand dollar fell today in the face of unrelenting gloom about the global economy.
Comments from a Group of Seven finance ministers meeting were pessimistic, stock markets were weak and Japan said its economy shrank 3.3 percent, or an annualised 12.7 percent in the fourth quarter of 2008.
The finance ministers talked of a severe downturn likely to persist through much of 2009. "That kind of set the tone," said BNZ Capital currency strategist Danica Hampton.
There were also rumours that hedge funds were in trouble and ongoing speculation that Ireland will default on its debt.
"The market has a real risk aversion feel to it. Global sentiment is dismal," said Ms Hampton.
The NZ dollar was US51.93c at 5pm, having traded down to US51.80c from the US52.34c at 8am today. It closed its local session at US52.45c on Friday.
With no more economic data due locally this week the focus is likely to be on the global economic story and stock markets.
"The NZ dollar will be driven mainly by offshore dynamics this week. Global sentiment towards risk is locked in a tug-of-war between stimulus optimism and stimulus inadequacy," Westpac said. The NZ dollar was little changed against the Australian dollar, worth A79.60c from A79.61 on Friday. It was up against the euro at 0.4066 from 0.4055.
It was little changed against the Japanese yen at 47.60 yen from 47.78 on Friday.
Against the British pound it was lower at 36.50p to 36.63p.
The trade weighted index was 52.71 from 52.83 on Friday.
