Thursday 4th August 2011
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The New Zealand dollar has briefly touched a one-year high against its Australian counterpart and weakened against the euro, with investors growing increasingly risk averse as poor economic data keeps coming in the United States.
Hopes for a pickup in US economic activity in the second half of the year were dealt another blow after reports showed the pace of growth in the US services sector ticked down unexpectedly in July and the number of jobs created by the private sector slowed.
"The US economy is stagnating. Clearly the job outlook is deteriorating right now," said Greg Salvaggio, senior vice president at Tempus Consulting in Washington.
"So we are seeing the market very, very risk averse for the time being."
The NZ dollar touched a high around A80.70c against the aussie overnight, but by 8am was down to A80.18c, little changed from its level at 5pm yesterday.
The kiwi was also little changed at US86.20c, while dropping to 0.6020 euro at 8am from 0.6065 at 5pm, and falling to 66.34 yen from 66.59, having touched a three-week low near 66 yen. The trade weighted index was down to 73.74 at 8am from 74.05.
ANZ bank said that while global equity markets -- which have hit lows for the year -- continued their move in recognition of reality, the NZ dollar should remain under pressure.
Trading today may be dominated locally by second quarter unemployment figures, due to be released at 10.45am, ANZ said.
"This is an erratic release so any positive surprise will see the NZD spike but this should be met with appropriate levels of selling. Equity markets still hold the key and have further downside potential."
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