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Easing NZ Dollar Slides Against Broadly Stronger Greenback

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, June 24 NZPA - A widely easing New Zealand dollar lost about two-thirds of a cent against a broadly strengthening greenback overnight.

By 8am the kiwi was buying US75.76c, having ranged between about US76.35c and US75.60c during the night.

The US dollar rose as weak euro zone data took the steam out of last week's euro rally and investors braced for a Federal Reserve statement this week that will likely focus on rising US inflation pressures.

The Fed's inflation mindset when it announces its monetary policy decision should ensure that US interest rates remain unchanged after a string of cuts since mid-September, analysts said.

Earlier in the session, reports showed high energy costs had soured German business sentiment and the euro zone's manufacturing and service sectors contracted in June, denting the case for higher euro zone interest rates and punishing the euro across the board.

Bank of New Zealand currency strategist Danica Hampton said the kiwi initially came under selling pressure overnight after the euro slid against the US currency, triggering a bout of US dollar strength.

Real money accounts were noted sellers of the NZ dollar out of both Europe and Asia, which helped push the kiwi lower through support at US76c, she said.

The NZ dollar had later stabilised in a range between US75.60c and US75.80c, with little impetus coming from either US data or US stock markets.

Against the Australian dollar, the kiwi dropped below A79.40c early today, near 6-1/2-year lows hit a fortnight ago. It then regained a little lost ground to be at A79.57c at 8am today, from A79.77c at 5pm yesterday.

The NZ dollar was also buying 0.4878 euro at today's local open from 0.4884 at 5pm, and slipped to 81.65 yen from 81.91. The trade weighted index was 67.94 at 8am from 68.17.

NZPA WGT Reuters mjd kn

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