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NZ Dollar Recovers Half Of 1.3c Early Evening Tumble Vs USD

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Sept 3 NZPA - The New Zealand dollar overnight recovered about half of the 1.3c it lost to the greenback yesterday evening.

By 8am the kiwi was buying US68.69c, having climbed from a year low just above US68c around 8pm yesterday. The NZ dollar had tumbled from above US69.30c during a three-hour period.

The US dollar rose to a 10-1/2 month high as measured by a basket of major currencies, boosted by a sharp drop in oil prices, to below $US106 a barrel at one point, and persistent concerns about the health of other major global economies.

"The decline in crude oil is probably the big catalyst for the (US) dollar move," said Stephen Malyon, senior currency strategist at Scotia Capital in Toronto.

The greenback also drew support from weakness in high-yielding currencies triggered by the Reserve Bank of Australia's interest-rate cut by 25 basis points to 7 percent, as expected.

Bank of New Zealand currency strategist Danica Hampton said heavy selling of the aussie by various macro-driven accounts was one factor pressuring the NZ dollar down to within a whisker of US68c -- its lowest level since August 2007.

The US dollar strength started to fade as US stock markets erased earlier gains and as a report on US factory activity disappointed expectations a little, she said.

The kiwi strengthened against the Australian currency overnight but eased against major currencies.

By today's local open the NZ dollar was buying A81.97c from A81.25c at 5pm yesterday.

It slipped to 74.69 yen from 75.01 and to 0.4735 euro from 0.4752. The trade weighted index was 64.80 at 8am from 65.01 at 5pm.

NZPA WGT Reuters mjd nb

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