The New Zealand sharemarket opens today after a night of international financial drama which saw the Federal Reserve slash a key United States interest rate by a bold three-fourths of a percentage point.
The Fed was responding to a global plunge in stock markets that heightened concerns about a recession in the US. It signalled further rate cuts were likely.
The reduction in the federal funds rate from 4.25 percent down to 3.5 percent marked the biggest reduction in this target rate for overnight loans on records going back to 1990.
It marked the first time that the Fed has changed rates between meetings since 2001, when the central bank was battling the combined impacts of a recession and the terrorist attacks.
Federal Reserve Chairman Ben Bernanke and his colleagues approved the large rate cut after an emergency video conference on Monday night (local time), after global markets had been pounded by rising concerns that weakness in the world's largest economy was spreading worldwide.
In this country, the Reserve Bank is due to review the official cash rate, now at 8.25 percent, tomorrow.
Even before the Fed's announcement, which came about 2am NZT, the New Zealand Dollar had started rising against the greenback.
From a three-month low below US74c around 9pm, the kiwi rose through the night to around US76.60c at 7am.
Bank of New Zealand currency strategist Danica Hampton said rumours of a US rate cut had swirled round markets before it happened, and expectations a cut was coming had been a main reason the kiwi started rising when it did.
Despite that, she thought the rise in the NZ dollar was "a bit of knee-jerk buying" and even though Australasian developments in the next few days were likely to support the kiwi there was a risk the kiwi would weaken towards the US74c level.
In an indication of what could be in store for the New Zealand sharemarket today, the Fed's interest rate move appears to have had some calming effect on world stock exchanges.
While Wall Street initially plunged at the opening, with the Dow Jones Industrial Average down 465 points before stocks began to rebound, the Dow was down 120 points in early afternoon trading.
In Europe, the pan-European FTSEurofirst 300 index ended 1.9 percent higher at 1304.37 points led by financial stocks, ending a five-day losing run.
Germany's DAX was 0.3 percent lower, making it the worst performer among European indexes. Britain's FTSE 100 index rose 2.9 percent, and France's CAC 40 added 2.1 percent.
Yesterday the New Zealand sharemarket turned an early 4 percent loss into a 1 percent decline, avoiding panic even as markets around it tumbled. Australia's benchmark index was down 6 percent.
Prime Minister Helen Clark is making soothing noises.
"New Zealand is in a strong position compared with many countries facing this particular round of international volatility," she said.