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NZ Dollar Slips Further Overnight After Yesterday's Slump

Fuseworks Media
Fuseworks Media

Wellington, May 9 NZPA - The New Zealand dollar slipped further overnight after yesterday's slump, caused by a report showing 29,000 jobs were lost in the March quarter.

Early today the kiwi dropped to its lowest level in more than three months against the greenback, around US76.90c, having been around US78.20c before the jobs report came out yesterday.

Most of the kiwi's fall happened during a 90-minute period of hectic trading after the late morning release of the data.

By 5pm yesterday the NZ dollar had been at US77.28c and, after recovering a little from its early morning dip, was at US77.12c by 8am today.

The continued fall against the Australian was more obvious and by today's local open the kiwi was buying A81.74c -- near a nine-month low against its trans-Tasman counterpart -- from A82.16c at 5pm yesterday.

In contrast to this country, Australia yesterday reported stronger than expected jobs data.

The kiwi was also down to a three-week low of 79.75 yen against the Japanese currency early today. By local open it was at 80.17 yen from 80.69 at yesterday's local close.

Against the European currency, the kiwi got to a week low just under 0.5000 euro early today, but by 8am was back up to 0.5010 from 0.5045 at 5pm yesterday.

The trade weighted index was 69.09 at the local open from 69.44.

Among the major currencies, the euro rebounded from a two-month low against the US dollar, after the European Central Bank left interest rates unchanged and its president focused more on inflation than some had expected.

In its briefing notes today, ANZ bank said the NZ dollar should spend a day consolidating, but remained vulnerable to further drops.

"Yield is still attractive, but the question is for how long more, as the market is now pricing in multiple rate cuts from the RBNZ over the next 12 months," ANZ said.

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