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NZ Dollar Falls Against Generally Firmer US Dollar

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, May 28 NZPA - After reaching a seven-month high around US62.60c shortly after 8am yesterday, the New Zealand dollar trended lower in irregular steps.

By 8am today the kiwi was buying US61.60c, having staged a small recovery in the early hours of the morning but then fallen away rapidly from US62.35c around 4am.

BNZ Capital currency strategist Danica Hampton said that overnight a generally firmer United States dollar kept downward pressure on the NZ dollar.

Solid demand at a US Treasury auction and doubts about global economic green shoots underpinned the greenback, she said.

Yesterday, the NZ dollar had come under a wave of selling pressure following the announcement by Fonterra of a milksolids payout of $4.55/kg for the 2009/10 season, well below the current season's $5.20.

The NZ dollar was also down to 58.67 yen at 8am from 59.30 at 5pm, and edged down to 0.4434 euro by the local open.

Against the Australian dollar the kiwi was up to A79.24c from A78.96c at the local close, while the trade weighted index slipped to 58.77 at 8am from 59.08 at 5pm.

The US dollar rose against the euro as fears of a US credit downgrade faded and a European Central Bank official said interest rates could fall further if economic conditions worsen.

NZPA WGT Reuters mjd kn

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