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NZ dollar dips as Wellington CBD checked for quake damage

Monday 22nd July 2013

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The New Zealand dollar opened weaker as authorities warned workers in Wellington's CBD to stay home pending an assessment of earthquake damage, which closed bank trading rooms and sent glass and rubble falling from buildings.

The New Zealand dollar traded at 79.05 US cents from 79.29 cents in late New York trading on Friday. The trade-weighted index fell to 75.04 from 75.25.

A swarm of quakes off the coast near Seddon in the upper South Island topped out with a magnitude 6.5 shake at 5.09 pm on Sunday, bigger than the devastating magnitude 6.3 quake that damaged Christchurch in February 2011.

Its relative remoteness meant damage was much less severe though with the risk of aftershocks, the kiwi dollar detached from weekend news including China's move to loosen lending rates, Japanese Prime Minister Shinzo Abe upper house election victory and Portugal's failure to reach a political accord to keep its bailout on track.

"The market is a little bit lower" on the back of the earthquakes, said Alex Sinton, senior dealer at ANZ New Zealand. "It's not as low as the situation when the Christchurch earthquake struck" though its fall may extend as offshore markets focus on the event.

Sinton expects "the low-to-mid 78 (US cents) region should hold for the kiwi" though that could be tested if, for example, the Reserve Bank felt the need to comment on the earthquake.

Among businesses affected, Wellington buildings of both Bank of New Zealand and ANZ New Zealand were closed for checks.

The kiwi fell to 86.07 Australian cents from 86.36 cents, with the Australian currency stronger following the Bank of China move to drop the floor on borrowing costs that had been set at 30 percent below its benchmark rate.

The kiwi dollar fell to 79.51 yen from 79.80 yen after Abe's coalition won a majority in an election to the Japanese parliament's upper house. The local currency fell to 60.14 euro cents from 60.27 cents and slipped to 51.74 British pence from 51.90 pence.

BusinessDesk.co.nz

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