The New Zealand dollar declined against the euro after a positive survey of German business confidence bolstered investor sentiment about Europe's largest economy.

The kiwi fell to 69.29 euro cents at 8am in Wellington, from 69.87 cents at 5pm yesterday. The local currency slipped to 75.94 US cents from 76.40 cents yesterday.

The euro strengthened after Germany's IFO business climate index increased for a fifth month, climbing to 107.9 in March from 106.8 in February, the strongest reading since July 2014 and higher than the 107.3 expected in a Reuters poll. The latest report adds to positive sentiment about German economic growth after strong manufacturing data this week and a positive ZEW economic sentiment survey last week.

"German IFO confidence continues to improve supporting euro near the top of its recent range," ANZ Bank New Zealand senior economist Sharon Zollner and senior FX strategist Sam Tuck said in a note. "With the New Zealand dollar seeming ready to test lower, this cross should continue to consolidate, reverting some of the recent gains."

The kiwi will probably trade between 68.80 euro cents and 70 cents today, ANZ said. The local currency touched a record 70.74 euro cents earlier this week.

With little data scheduled for release, the focus for many traders now turns to a speech at the end of the week by Federal Reserve Chair Janet Yellen. She is scheduled to speak at the Federal Reserve Bank of San Francisco Conference on Friday on "The New Normal for Monetary Policy".

The New Zealand dollar was little changed at 96.85 Australian cents from 96.86 cents yesterday, fell to 51.07 British pence from 51.37 pence and declined to 90.83 yen from 91.37 yen. The trade-weighted index slipped to 79.16 from 79.49 yesterday.