Wellington, Aug 12 NZPA - Further strength in the US dollar pushed the New Zealand dollar and other currencies lower today, with the kiwi hitting a fresh 11-month low.
By 5pm, the kiwi was at US69.70c from US70.05c late yesterday afternoon. With the Australian dollar easing the best part of a US cent in that time, the kiwi gained on the cross-rate to A79.47c from A78.98c at 5pm yesterday.
"Kiwi really has been struggling, but in the bigger picture it's really a US dollar story, and the unwinding of short US dollar positions which we've seen over the last week or so," said Daniel Brdanovic of HSBC.
"That's been in line with commodity prices coming off as well -- it's been quite a move, and we're not sure yet whether this has bottomed out, but I wouldn't be surprised if we do see some profit-taking at some stage."
The US dollar hit a six-month high against a basket of major currencies, as mounting concern that the global economy is headed for a sharper slowdown spurred more selling of the euro and higher-yielding currencies.
The euro slumped to a six-month low against the US dollar, while sterling slid to a 21-month trough as investors kept bailing out of bets that the global economy could withstand the housing-driven downturn in the United States.
Market players such as macro funds are cutting losses by covering short positions in the dollar, unwinding bets favouring the euro, Australian dollar and commodities. The slide in oil and gold prices has only reinforced the dollar's sharp rebound.
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