Wellington, Aug 18 NZPA - The New Zealand dollar retreated a little today after gaining some of the ground when firm sharemarkets and solid European debt auction restored some appetite for risk.

By 5pm the NZ dollar was at US71.06c, down from US71.24c at 8am and little changed from the US71.02c at 5pm yesterday.

BNZ markets strategist Mike Jones said that reduced fears about the health of the global economy and strong gains in global equity markets buoyed investors' risk appetite, underpinning gains in growth-sensitive currencies such as the NZ dollar. Solid Irish and Spanish bond auctions also helped sentiment.

The positive sentiment carried on into Asia, where sharemarkets were mostly firm.

The NZ dollar's shaky performance against the Australian dollar is continuing. It fell at one point to a 3-1/2-month low around A78.50c overnight. By 5pm it was A78.78c, little changed from A78.77c at the same time yesterday.

BNZ said the NZ dollar is approaching a "platinum status" support line on the Australian cross at around A77.80c. A break would open up the A75.60c lows as the next target.

By 5pm the NZ dollar was little changed against the European currency, buying 0.5535 euro from 0.5529 at the same time yesterday. It was at 60.73 yen from 60.60 at the same time yesterday.

The trade weighted index was 66.31 at 5pm from 66.20 yesterday.