The New Zealand dollar extended its retreat, weighed down as weaker stock markets saw investors turn more risk averse. The kiwi retreated to levels of a week ago as the enthusiasm for higher-yielding currencies such as the kiwi, which had seen it hit a three-month high against the US dollar on Monday, disappeared.
"Weak global equities encouraged investors to trim positions in growth-sensitive currencies like the NZ dollar in favour of the relative safety of the US dollar," said Bank of NZ currency strategist Danica Hampton. The kiwi was trading at $0.5726/30 against $0.5821/27 in late local trading on Tuesday.