United States stock prices rose, helping the Dow post its fifth straight monthly gain, on hopes the possible fallout from Dubai's debt woes would be contained.
"Dubai doesn't seem to have rippled the market as much as we first thought. The Dow Jones was up 35 points. Our market dropped on Monday but less than first thought. New Zealand and Australia [markets] are rising strongly again."
It appeared the markets were coming to the conclusion Dubai was a small, localised event, he said.
Although the $US60 billion ($NZ83.3 billion) Dubai World owed sounded like a large figure, when compared with the trillions of dollars of debt pumped into global economies, Dubai was not such a big event.
Investors were initially concerned global banks still faced problems, but an index of bank stocks rose more than 3% as investors bet bank exposure to Dubai's debt problems would be limited, Mr Conroy said.
Other economic data, such as the Reserve Bank of Australia's interest-rate decision, held more interest for markets.
"People have been talking about the `W recovery' and Dubai being the start of the second leg of that. Now, people are talking about the `square root recovery' - down, up and flattening out."
Dubai would not have a lasting effect on the market, he said.
The US dollar slipped against major currencies yesterday as investors took the view that Dubai's debt problem would be contained.
Mr Conroy said when the news broke at the weekend, investors viewed the New Zealand currency as a "risky investment" and took their money home, forcing the value of the kiwi down.
The dollar was starting to recover as investors became more confident about Dubai, he said.
The US dollar's long-term weakness was expected to continue as investors believed US interest rates would remain low for a prolonged period, but it could get support from repatriation flows at the end of the year, dealers said.
Oil prices rose more than $US1 on Monday as the detainment of five Britons in Iran and a weak dollar outweighed concerns about debt-laden Dubai and its effect on the global economy.
US light crude oil futures for January rose $US1.23 to settle at $US77.28.
In London, Brent crude gained $US1.29 to settle at $US78.47.
Earlier, the United Arab Emirates' state news agency WAM reported the central bank governor, Sultan Nasser al-Suweidi, "said he did not see any reason for concern because UAE banks have increased their capitals . . . [and] as commercial banks have proven their ability to face the consequences of the world financial crisis".
The Dubai Government disclaimed responsibility for the debts of its Dubai World conglomerate on Monday, crushing earlier assumptions by creditors that the Persian Gulf emirate would guarantee its liabilities.
Mr al-Suweidi did not directly refer to Dubai's debt problems.
"I have an advice for foreign investors. They should study available investment opportunities and conduct realistic feasibility studies to make sure they are real opportunities with no risk," WAM quoted him as saying.
He reiterated a statement by the central bank on Sunday that it would stand behind banks in the UAE and had set up an emergency facility to support their liquidity.
