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Poor Night For NZ Dollar May Confirm Long Awaited Fall Of Kiwi

Fuseworks Media
Fuseworks Media

Wellington, April 30 NZPA - A poor night for the New Zealand dollar added to suspicions the long foretold fall of the kiwi may be under way.

During the overnight session the kiwi hit a three-month low against the greenback, and made it down to its lowest level against the Australian dollar in nearly half a year.

"All the action in the NZD took place overnight as the rot became more evident to the offshore market," the ANZ bank said in its morning brief.

The NZ dollar had broken down through major support around A83c against the aussie overnight, setting it up for a further run lower.

Exceptionally strong Australian inflation data last week, along with a softer tone from the Reserve Bank in this country, had highlighted the diverging economic and policy outlooks between the two countries, ANZ said.

That comes against the backdrop of a rising US dollar, as expectations grow that the Federal Reserve will soon signal the end of its easing campaign.

During the overnight session the kiwi got down to around US77.25c, having been at a near four-week high just shy of US80.40c a week ago. The NZ dollar did recover a little to be buying US77.53c at 8am today, from US78.22c at yesterday's local close.

Against the aussie, the NZ dollar slumped to around A82.75c, having dropped during the past five weeks from near A88.20c. By today's local open the kiwi was at A83c, from A83.55c at 5pm yesterday.

From 0.5495 against the euro two months ago, and 0.5030 early yesterday, the NZ dollar touched a low of 0.4960 early today, then made up a little of the lost ground to 0.4979 by 8am.

Against the yen, the kiwi slid from near 82.30 late on Monday to a low of 79.92 early today, having been as high as 88.10 two months ago. By 8am the NZ dollar was at 80.62 yen.

The trade weighted index was 69.34 at today's local open from 69.84 at 5pm yesterday.

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