Dollar falls to record low against Aussie

Thursday 16th December 2010

The New Zealand dollar tumbled, hitting a decade low against its Australian counterpart and touching its lowest level against the greenback in two weeks.

The kiwi fell below A75c for the first time since 2000, dropping below A74.85c briefly early today. By 8am it was buying A75.06c from A75.27c at 5pm yesterday.

BNZ currency strategist Mike Jones said the fall against the aussie came amid ongoing selling interest from momentum and speculative type players.

Also NZ-US three-year swap spreads slipped to the lowest level since April, undermining yield support for the NZ dollar.

Not even a solid result at the overnight Fonterra milk price auction, where prices were up 2.4% on a fortnight earlier, could prop up the ailing NZ dollar, Mr Jones said.

The US dollar was bolstered by data showing a steady recovery in New York state's manufacturing sector.

The kiwi was around overnight lows against the US dollar at US74.15c by 8am, down from US74.92c at 5pm, with the NZ dollar also falling to a fortnight low against the Japanese currency, and buying 62.44 yen at 8am from 62.78.

The NZ dollar fell against the euro, despite the European currency continuing to be shaky, with ratings agency Moody's saying it may downgrade Spain's debt rating. The kiwi dropped to a six-week low around 0.5565 euro, although by 8am it had pushed back to 0.5592 euro, still down from 0.5611 at 5pm.

The trade weighted index fell to 67.07 at 8am from 67.44 at 5pm.

NZPA

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