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NZ dollar dips as Sandy nears New York, Bank of Japan looms

Tuesday 30th October 2012

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The New Zealand dollar fell as Hurricane Sandy nears New York, shuttering the New York Stock Exchange and eroding risk appetite, and as the Bank of Japan's review of monetary policy looms.

The kiwi dollar fell to 81.88 US cents from 82.13 cents at 5pm in Wellington yesterday. The trade-weighted index slipped to 73.20 from 73.31.

Warnings are in force along the US east coast as Sandy nears land and connects with cold fronts from the north. Meantime, weak Spanish retail sales weighed on the euro. The Bank of Japan is expected to add to its stimulus efforts when it announces its review today.

"With the US busy battening down the hatches ahead of Hurricane Sandy, currency markets were relatively quiet overnight," said Mike Jones, currency strategist at Bank of New Zealand. "Creeping risk aversion buoyed 'safe-haven' demand for the USD, which is higher relative to all the major currencies."

Markets may remain closed tomorrow as well, according to the Securities and Exchange Commission. The storm is expected to wreak havoc for millions of people. Futures on the Dow Jones Industrial Average, the Standard & Poor's 500 Index and the Nasdaq Composite Index all declined.

The kiwi dollar fell to 63.42 euro cents from 63.51 cents and traded at 51.09 British pence from 51.05 pence. The currency was little changed at 79.20 Australian cents and fell to 65.36 yen from 65.47 yen.

BusinessDesk.co.nz

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