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NZ Dollar Dips Below US70c In Mixed Session

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Feb 1 NZPA -The New Zealand dollar tested the US70c level at the start and the end of a mixed session today.

International events, as usual, are driving the market, and one of the biggest events in the diary is tomorrow when the Reserve Bank of Australia pronounces on interest rates.

Though one dealer said the NZ dollar market was currently following the direction of global commodity and equity markets.

The NZ dollar was at US70.02c at 5pm from US70.19c at 8am and US70.43c at 5pm on Friday.

The NZ dollar dipped below US70c in early trading when the Australian dollar dipped.

"Kiwi then bounced back quite aggressively to US70.47c and the aussie went up as well," one dealer said. Then the NZ dollar fell again as the Australian dollar came under pressure and Asian equity markets weakened.

Westpac said it had a bearish outlook on the NZ dollar this week even though the market was ripe for a corrective bounce.

"Last week was another positive one for the US dollar, and a negative one for all other major currencies, apart from the yen. US economic data continues to point to a faster recovery than is consensus, supporting the US dollar, while global sentiment towards risk remains depressed, weighing on commodity currencies, in particular," Westpac said.

"This is against a background of supportive macro-economic outlooks for both NZ dollar and Australian dollar, illustrating the dominant influence of sentiment as a determinant of exchange rates."

Westpac sees potential for the NZ dollar to fall against the Australian dollar this week if the Reserve Bank of Australia raises interest rates, as expected on Tuesday.

The NZ dollar was A79.36c at 5pm today from A78.93c at Friday's local close.

The euro has been under pressure from concerns about the fiscal health of some of the smaller euro zone countries including Greece and Portugal.

The NZ dollar edged to 0.5049 euro at 5pm today from 0.5052 at 5pm on Friday, and to 63.12 yen from 63.38. The trade weighted index was 64.66 at 5pm from 64.72 at the local close on Friday.

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