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NZ dollar falls as weak US data adds to concern global growth easing

Friday 19th April 2013

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The New Zealand dollar fell as weaker US data and disappointing earnings stoked concerns global growth may be slowing and weighed on stocks and risk appetite.

The kiwi fell to 84.11 US cents from 84.51 cents at 5pm in Wellington yesterday. The trade-weighted index fell to 77.65 from 77.99.

The Philadelphia Federal Reserve Bank's business activity index fell to 1.3 in April from 2.0 in March and the Conference Board's index of leading indicators posted a surprise drop, while initial claims for state unemployment benefits climbed. The Standard & Poor's 500 Index fell 0.7 percent on disappointing earnings from companies including Morgan Stanley and eBay.

"Everyone is focusing on growth at the moment and commodities have had a broad pullback this week," said Stuart Ive, senior dealer at HiFX. "The kiwi has drifted down on the back of that."

The New Zealand dollar may trade in a range of 83.60 US cents to 84.70b cents today and may reach the bottom of that range in coming days, he said.

Traders will be watching for the Group of 20 nations meeting that starts today in Washington after Bloomberg cited a draft statement saying the G20 will affirm a commitment to avoid weakening their currencies to gain a trade advantage. It didn't specifically mention Japan or the yen.

The New Zealand dollar fell to 82.60 yen from 82.94 yen. The local currency fell to 64.47 euro cents from 64.75 cents after a successful Spanish bond auction of 4.71 billion euros, beating a target of 4.5 billion euros.

The kiwi fell to 81.65 Australian cents from 82.02 cents and dropped to 55.05 British pence from 55.40 pence.

BusinessDesk.co.nz

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