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NZ dollar broadly lower


Tuesday 16th August 2011

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The New Zealand dollar fell broadly as global equities climbed further out of their hole amid hopes of progress in Europe's debt crisis.

At 8am the kiwi was buying US83.25c, down from US83.74c at 5pm yesterday. It was also down to A79.24c against the Australian dollar from A80.33c.

BNZ strategist Kymberly Martin said a general stabilisation in risk appetite had been the key driver of currencies overnight.

The NZ dollar lost ground against a broadly stronger euro and British pound, while the kiwi came under pressure against the aussie, she said.

Some stabilisation in global markets had seen a reduction in expectations for Australian rate cuts, helping boost Australian three-year swap rates.

Further reversal of rate expectations could see the cross move toward A78.50c in the short term.

The NZ dollar was down to 0.5764 euro at 8am from 0.5858 at 5pm, and dropped to 63.93 yen from 64.30. The trade weighted index dropped to 71.34 from 72.19.

Westpac senior market strategist Imre Speizer said the Australian dollar had been supported by an improvement in investor confidence, but the NZ dollar was "curiously depressed".

ANZ said the NZ dollar would be in recovery mode today after being frozen out of euro and aussie moves overnight.

The Swiss franc fell to its lowest level in two weeks against the euro and US dollar on speculation the Swiss National Bank could further intervene to curb appreciation in the currency by setting an exchange-rate target this week.

The euro rose to nearly three-week highs against the US dollar, boosted by some expectations of a positive outcome of a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel to discuss the debt crisis.

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