Sharechat Logo

NZ dollar drops to nine-month low as investors move to Treasuries on growth concerns

Thursday 6th June 2013

Text too small?

The New Zealand dollar fell to a nine-month low as investors concerned about global growth moved to the relative safety of US Treasuries.

The kiwi dropped to as low as 79.25 US cents early this morning and recently traded at 79.48 cents, down from 80.46 cents at 5pm yesterday. The trade-weighted index slid to 74.64 from 75.45.

Investors sold equities and bought US Treasuries after some US reports raised concerns about the pace of the recovery in the world's largest economy. A report from the ADP Research Institute said US companies added fewer workers in May than expected and the Federal Reserve said in its Beige Book business survey that the economy expanded at a "modest to moderate" pace.

"People are a little bit concerned about the strength of the US economy, there is generalised risk aversion," said Michael Johnston, a senior trader at HiFX. "People are getting a bit nervous out there and the kiwi is coming off as a consequence. We still think we can go further."

HiFX expects the kiwi to drop as low as 75 US cents this year, possibly in the next two months, he said.

"The kiwi is being buffeted by offshore events," Johnston said.

The Dow Jones Industrial Average fell 1.4 percent while 10-year Treasuries rose, pushing the yield down about 6 basis points to 2.09 percent. Traders are now looking ahead to US non-farm payrolls for May, due on Friday for further evidence of the pace of the labour market.

The New Zealand dollar was little changed at 83.42 Australian cents, from 83.41 cents at 5pm yesterday. The kiwi slipped to 78.91 yen from 80.21 yen and dropped to 60.77 euro cents from 61.46 cents. The local currency slipped to 51.66 British pence from 52.50 pence yesterday.

NOTE: please be advised to read full articles from Business Desk Website, you will have to pay a subscription fee on their website.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar holds gains on improved dairy, bank capital outlook
MARKET CLOSE: NZ shares gain; banks rally on Reserve Bank capital decision
NZ dollar rises; bank capital rules less harsh than expected
RBNZ relaxes capital requirements, allows preference shares, extends phase-in
NZ dollar extends gain amid mixed US data, possible trade progress
MARKET CLOSE: NZ shares dip on eve of major regulatory decisions
NZ dollar sees off global headwinds, holds above 65 US cents
NZ dollar holds above 65 US cents; dairy auction prices mixed
Dairy index falls on weaker butter, milk fat demand
MARKET CLOSE: NZ shares join global decline; US tariff move weighs on exporters

IRG See IRG research reports