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NZ Dollar Drifts Down In Lacklustre Trade

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Feb 20 NZPA - The New Zealand dollar embarked on a slow drift down today and is expected to remain hostage to events outside New Zealand next week.

The NZ dollar was worth US50.36c at 5pm from US51.20c at 5pm yesterday.

The big move was on the Australian cross to A78.80c from A79.70c yesterday.

"There was a lot of selling of kiwi against the aussie after the Reserve Bank of Australia (RBA) governor downplayed the likelihood of further aussie rate cuts," said BNZ currency strategist Danica Hampton.

RBA governor Glenn Stevens did not rule out cutting the cash rate from its present 45-year low of 3.25 percent but said the rate is unlikely to fall to zero.

"We'll be prepared to go low enough to what is needed," Mr Stevens told a House of Representatives Economics Committee hearing in Canberra on Friday.

"It is not my present expectation we're going to find ourselves at nothing," Mr Stevens said.

Ms Hampton said overall the NZ dollar had looked perky early on in the session but then US equities tanked.

Weakness in the equity markets increases the aversion to risky markets like the NZ dollar market.

The NZ dollar was also down against the euro at 0.3991 from 0.4068.

It was down against the Japanese yen to 47.37 from 47.98 yesterday and was lower against the British pound, at 35.41p from 35.87p yesterday.

The trade weighted index was 51.71 from 52.49 yesterday.

Next week the local diary includes the National Bank business outlook survey but sentiment about the world economy and financial markets is again expected to dominate.

NZPA WGT Reuters pjg cw

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