Sharechat Logo

NZ dollar tumbles after OECD cites global growth risks

Wednesday 23rd May 2012

Text too small?

The New Zealand dollar tumbled after the Organization for Economic Cooperation and Development warned of the risks that the euro zone's debt crisis poses to the rest of the world.

The New Zealand dollar fell to 75.40 US cents at 8am, from 76.52 cents at 5pm yesterday. The currency had jumped by a similar amount yesterday. The trade weighted index decreased to 68.59 from 69.23.

The kiwi sank as EU leaders meet in Brussels to discuss how to bolster the region's growth. The OECD warned the region's debt crisis risks damaging the world economy.

"The currency market is taking the view that it will be a meeting of disappointment," said Imre Speizer, market strategist at Westpac Banking Corp. "If the kiwi breaks below 75.20 cents you can assume that the May sell-off has resumed," he said.

The OCED warning comes after leaders from the eight largest industrial economies pushed for Greece to stay in the euro. Divisions are still evident over the need for growth versus austerity measures between the G-8 nations.

Greece's three main political parties were unable to form a government, following the nation's May 6 election. Fresh elections will now be held in early June.

The New Zealand dollar fell to 47.85 British pence from 48.37 pence yesterday at 5pm after the International Monetary Fund said more stimulus, such as quantitative easing is needed to boost the nation's economy.

The Bank of England will release the minutes from its May meeting today. The bank's base rate currently remains unchanged at 0.5 percent.

In the world's largest economy, the US, existing homes sales rose 3.4 percent last month, according to the National Association of Realtors. That's the best annual sales pace since May 2010, helping firm up optimism the housing market is stabilising.

New home sales figures are out today, with purchases expected to have climbed 2.9 percent to a 4.61 million annual rate in April, according Bloomberg survey. Initial jobless claims and durable goods orders are released on Thursday.

New Zealand Finance Minister Bill English's fourth Budget will be the major local news this week. English is expected tomorrow to unveil a path towards getting the government's books back into operating surplus in 2014/15, and has promised a second successive 'zero' budget.

The New Zealand dollar decreased to 76.84 Australian cents from 77.02 cents and fell to 59.50 euro cents from 59.82 cents. The kiwi declined to 60.37 yen from 60.73 yen.

BusinessDesk.co.nz

Father's Day SOON! Crazy Deals on ALL IRG Yearbooks - More than 50% OFF - $19.99 for 44th IRG Yearbook 2018-2019


  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 gains on G20 preference for growth
NZ dollar dips as Wellington CBD checked for quake damage
NZ dollar gains, bolstered by RBA minutes, strong dairy prices
NZ dollar falls after central bank says it may scale up currency intervention
NZ dollar gains before CPI, helped by dairy gains, rally on Wall Street
NZ dollar trades little changed as US budget talks bear down on deadline
NZ dollar falls with equities on view US to sail over fiscal cliff
NZ dollar weakens as fiscal cliff looms, long bets unwind
NZ dollar sinks to three-week low as equities fall, fiscal talks in focus
NZ dollar slips as fiscal cliff talks grind slower in Washington

IRG See IRG research reports