Wellington, Dec 3 NZPA - The New Zealand dollar consolidated above US75c today after a "night of vicious volatility in currency markets" on Thursday. The NZ dollar was at US75.44c at 5pm today, up slightly from US75.39c at 8am and improved from the US75.08c at 5pm yesterday. It was at A77.39c at 5pm from A77.29c at 8am and A77.91c at 5pm yesterday. BNZ currency strategist Mike Jones said the NZ dollar had traded in a wide range on Thursday night of vicious volatility in currency markets. It had initially fallen to almost US74.50c but rose later in the overnight session thanks to a late improvement in investors' risk appetite. The euro rose overnight and the upward momentum continued into the Asian trading day, though traders are wary of US payrolls data due later today. The euro has been boosted by reports the European Central Bank was buying Portuguese and Irish bonds. That followed investor disappointment ECB President Jean-Claude Trichet did not announce a more aggressive policy response to ease the euro zone debt crisis. The NZ dollar was little changed at 0.5716 euro at 5pm from 0.5711 euro at 8am and was lower compared to the 0.5728 at 5pm yesterday. The NZ dollar was also little changed at 63.16 yen by 5pm from 63.12 yen at the same time yesterday, while the trade weighted index was at 68.51 from 68.48 at 5pm. BNZ said the NZ dollar has shed almost four US cents in the last few weeks on worries about European debt and other factors. The NZ dollar had been looking over-stretched above US78c and on a "fair-value" analysis its value has reduced. "As we move towards year-end, we continue to hold the view that the balance of risks around the NZ/US dollar outlook are tilted towards the downside, at least in the short-term," BNZ said. A daily close below US74c would pave the way for a deeper correction toward US72c. Position-squaring by investors who had previously bought NZ dollars has potential to amplify a sell-off in the NZ dollar.

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