Wednesday 16th February 2011
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The New Zealand dollar headed lower overnight, and appears to be at risk of falling below US75c for the first time in seven weeks.
By 8am the kiwi was down to US75.24c from US75.72c at 5pm yesterday, while moving in a narrow band overnight against the Australian dollar between about A75.50c and A75.10c.
ANZ bank said the NZ dollar moved perilously close to support at US75.10c overnight but survived.
While today the market may see some initial attempts to the topside, technically the NZ dollar looked vulnerable to a move into the US74c zone, ANZ said.
"Ideally a move to (US74.40c), and commensurate cross moves, should flush out further support although this will not happen today."
With a local data drought, the NZ dollar would continue to be driven by offshore moves, with little support for the kiwi from a 3.9% rise in dairy prices at Fonterra's overnight auction.
Westpac senior market strategist Imre Speizer said the NZ dollar had broken a trendline from May 2010, and if that was sustained today it pointed to US74c.
Overnight the kiwi had followed the aussie lower, after the Australian dollar lost ground following an inflation report from China that did nothing to diminish expectations of further policy tightening.
The NZ dollar fell to 0.5568 euro at 8am from 0.5599 at 8am, and was little changed at 63.04 yen. The trade weighted index dropped to 67.32 at 8am from 67.64.
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