Kiwi drops to three week low against greenback

Monday 14th February 2011

The New Zealand dollar dropped to a three-week low against the greenback below US75.60c, as the US currency benefits from a spate of economic data reflecting a recovery well under way in the US.

After reaching its lowest ebb in the overnight Friday session the NZ dollar pushed back to be just over US76c at 8am today, similar to its level at 5pm on Friday.

The kiwi edged up to 0.5622 euro at 8am from 0.5596 on Friday evening, while slipping against the Australian dollar to A75.90c from A76.04c.

The euro, which hit a three-week low against the US dollar, temporarily pared losses after Egyptian President Hosni Mubarak stepped down.

"It was a kneejerk reaction and it didn't last because there are bigger things driving the euro right now," said Brian Dolan, chief currency strategist, at Forex.com in Bedminster, New Jersey.

"Egypt is now seen as a regional political drama and the market seems to think the risk of a fundamentalist takeover there is overblown. But the concerns most heavily weighing on the euro - the ongoing debt crisis - are still there, and for now, the downside is still in play," he said.

ANZ Bank said tests of support had been the order of overnight trading to end the week as the NZ dollar slid below US76c. A marginal recovery towards the close appeared rather unconvincing.

Markets were hardly likely to be enamoured with the NZ dollar again today as offshore developments took precedence, ANZ said.

The kiwi was also buying 63.43 yen at 8am today, similar to its levels at 5pm on Friday, while the trade weighted index edged up to 67.98 from 67.94.

NZPA

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