The New Zealand dollar lost ground against its major rivals on Tuesday morning in Asia as a slide in Asian stocks reduced demand for higher-yielding currencies.

Most Asian stocks opened weak today following a negative lead from Wall Street, where stocks declined sharply overnight amid doubts about the sustainability of economic recovery.

As of 10:30 pm ET, New Zealand’s NZX-50 was down 0.24%, Japan’s Nikkei Stock Average fell 2.48%, South Korea’s Kospi Composite declined 0.85%, Taiwan’s weighted average dropped 1.42%, Australia’s All ordinaries index slumped 0.47% and China’s Shanghai composite was down 0.33%.

In economic news, the number of permits for overall new housing construction in New Zealand increased in July by 3.1 percent, according to data released today by Statistics NZ.

With the volatile apartment category excluded, however, permits declined a seasonally adjusted 5.3 percent, compared to a 1.1 percent increase seen in June 2010.

The New Zealand dollar dropped to a 4-day low of 59.24 against the Japanese yen around 10:15 pm ET, compared to 59.85 hit late New York Monday. The kiwi-yen pair is presently worth 59.27 with 58.70 seen as the next likely support level.

The yen continued its recent rally as investors consider it as safe-haven in times of stock market slide. Japan’s better-than expected retail sales and industrial production figures for July also pushed the yen higher.

Japan’s Ministry of Finance reported today that its preliminary read on Industrial Production showed an increase of 0.3 percent in July, the first increase in three months. Economists had expected a 0.2 percent drop.

For the full year to July, Industrial Production was up 14.8 percent, up from 14.3% forecast by most economists.

At the same time, retail Sales in Japan increased in July by 0.7 percent compared to June, according to government data released today.

The Ministry of Finance also reported that for the full year to July 2010, retail sales increased 3.9 percent. Most economists forecast an on-month increase of 0.5 percent and an on-year increase of 3.5 percent.

The New Zealand dollar fell to a 5-day low of 0.7016 against the US dollar and a 4-day low of 1.8027 against the euro around 8:25 pm ET and both the pairs moved in a holding pattern thereafter.

The kiwi that closed Monday’s North American deals at 0.7072 against the greenback and 1.7917 versus the euro is presently quoted at 0.7034 and 1.7998, respectively.

Against the Australian dollar, the NZ currency plunged to a 13-day low of 1.2729 around 10:00 pm ET and a move below the 1.2740 support could set its weakest point in 4 months. The aussie-kiwi pair that closed yesterday’s deals at 1.2619 is presently quoted at 1.2718.

The Australian Bureau of Statistics said retail sales increased 0.7% compared to June to A$20.4 billion, compared to a revised 0.4% increase in the previous month. Economists had forecast another 0.4% rise.

At the same time, Australia’s current account balance recorded a deficit of A$5.6 billion at the end of the June quarter, down from a A$16.5 billion deficit in the March quarter, official figures showed today.

Looking ahead, Japan’s housing starts for July and small business confidence for August are expected at 1:00 am ET.

Italian business confidence, CPI, German unemployment rate and euro-zone CPI-all for August, Italian retail sales for June and unemployment rate for July are expected to garner market attention in the upcoming European session.

Turning to the U.S., the S&P/Case-Shiller home price for June, Chicago PMI for August and the US consumer confidence for August are slated for release in the North American session.

At 2:00 pm ET, the US Federal Open Market committee will release its latest monetary policy meeting minutes.

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