Kiwi weakens amid signs of slowing recovery

Tuesday 17th May 2011

The New Zealand dollar weakened as signs of a slowdown in economic recovery weighed on global stocks and oil prices.

From US78.44c against the greenback at 5pm yesterday, the kiwi bottomed at a five-week low near US77.50c before regaining some lost ground to be at US78.17c at 8am today.

The NZ dollar also tumbled from 0.5564 euro at 5pm to 0.5513 at 8am, reaching a one-week low around 0.5490 euro during the overnight session.

The euro jumped from seven-week lows against the US dollar as a European Union meeting showed support for debt-burdened countries, lifting demand for the single-currency after last week's sharp sell-off.

BNZ strategist Kymberly Martin said the NZ dollar had a rocky night against the US currency against a backdrop of declining global commodity prices and a tick up in global risk aversion.

Overnight, the Australian dollar held up somewhat better despite the weak commodities backdrop, she said.

The NZ dollar fell to A73.82c against the aussie at 8am from A74.32c at 5pm, and was down to 63.14 yen from 63.44. The trade weighted index dropped to 67.80 from 68.23.

NZPA

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