The New Zealand dollar emerged from the overnight session relatively unscathed by souring risk appetites which left equities mired in the red as the cost of Spain's borrowings continued to rise.
The kiwi recently traded at US79.60 cents, up from US79.52c at 5pm yesterday, while on the Trade Weighted Index of major trading partners' currencies it slipped to 72.36 from 72.43.
Equity markets, the main proxy for investor sentiment, extended their recent losses after yields on Spanish 10-year bonds rose above the 7 per cent level, fanning fears that the euro debt spiral is spinning beyond the control of policymakers.
Many economists regard six per cent as the upper limit of long term debt sustainability, a level last seen by Spain's benchmark bonds in early May.
On Wall Street, the Standard & Poor's 500 Index fell 0.3 per cent to 1351.02 in afternoon trade, and in Europe the Stoxx 600 closed 0.4 per cent lower at 253.46.
The impact on the euro was limited after European Central Bank head Mario Draghi said the bank stood ready to slash rates further if euro zone economic data continues to weaken. Last week the bank cut the headline lending rate by 25 basis points to 0.75 per cent, a euro era low.
The single currency recently traded at US$1.2313, up from US$1.2290 yesterday.
Local data is expected to give the kiwi a steer today, with the Institute of Economic Research's Quarterly Survey of Business Opinion likely to hog the spotlight.
"Today's QSBO is expected to be on the weak side, a result that would help to confirm the drift lower (in the kiwi)," ANZ said in a report.
The downside moves are expected to be mitigated by electronic card transaction data, which the market sees as 0.3 per cent stronger month-on-month, according to a Reuters poll. That's followed by Real Estate Institute house price figures and Chinese trade balance data later in the day, which ANZ said will "provide direction if surprising".
On the crosses the kiwi recently traded at 78.01 Australian cents, little changed from A78.04c at 5pm on Friday, and it was similarly stable against the yen, opening at 63.37 yen from 63 .31yen. The New Zealand dollar fell to 64.61 euro cents from 64.71 euro cents, and slipped to 51.27 pence from 51.34 pence.
On the day, the New Zealand dollar may fall as low as US79.20c, with gains capped at US79.90, according to ANZ, with the bias tipped to the downside.
http://www.stuff.co.nz/business/market-data/7250999/Kiwi-holds-ground-amid-rising-euro-jitters
