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NZ Dollar Slips Further Against Aussie, Lower Vs Greenback

Fuseworks Media
Fuseworks Media

Wellington, March 5 NZPA - The New Zealand dollar edged to a new near-decade low against the Australian currency, but managed to recover some ground after touching multi-week lows against the yen and euro.

The kiwi also slipped against the greenback, touching a week low around US68.50c, and by 8am was little changed at US68.60c, down from US68.99c at the local close.

Against the Australian dollar, the kiwi dropped to around A76.15c shortly before 7am, the lowest level since November 2000. An hour later the NZ dollar had edged back up to A76.30c, only a little lower than its level at the local close yesterday.

BNZ strategist Mike Jones said the NZ dollar was "double teamed" by deteriorating investor risk appetite and a broadly stronger US dollar.

Appetite for risk-sensitive currencies such as the kiwi began to come off the boil yesterday afternoon, as quotes reported from a Chinese central bank official spurred fears policy tightening could put the brakes on the roaring Chinese economy, Mr Jones said.

Against a backdrop of lacklustre global equities and reduced risk appetite, investors trimmed positions in the NZ and Australian dollars and the euro, returning to the relative safe-haven of the US dollar.

ANZ bank said offshore markets appeared to be picking up on local economic signals and pricing the NZ dollar accordingly. The NZ dollar moved smoothly through support yesterday and tested the resolve of buying interests overnight.

Last night the NZ dollar dropped to a three-week low around 0.5030 euro, but lifted to 0.5058 euro by 8am, up from 0.5041 euro at 5pm.

Having earlier risen against the US dollar after Greece's sale of 10-year bonds drew solid demand, the euro later succumbed to selling pressure after European Central Bank President Jean-Claude Trichet stuck to his view euro zone economic recovery would be uneven and fragile.

The kiwi also dropped to a four-week low 60.63 yen, before recovering to 61.17 yen at the local open, up from 60.99 yen at 5pm. The trade weighted index was down to 63.58 at 8am from 63.64 at 5pm.

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