Dollar dips futher

Friday 17th December 2010

The New Zealand dollar largely traded in narrow ranges overnight, but did dip to new recent lows against the major currencies, and to a new decade-low against the Australian dollar.

By 8am, the kiwi was buying US73.83, little changed from its level at 5pm yesterday, although earlier today it did dip to an 11-week low around US73.30c.

The NZ dollar was similarly little changed at 61.67 yen and 0.5541 euro, although did dip late last night to six-week lows against the Japanese and European currencies.

Against the Australian dollar, the kiwi slipped to A74.77c at 8am from A74.97c at 5pm, and during the session dropped down to around A74.30c, its lowest since October 2000.

BNZ currency strategist Mike Jones said small falls in business and consumer confidence reported yesterday had continued a recent run of downbeat New Zealand economic news, ensuring the NZ dollar underperformed relative to most of the major currencies.

ANZ bank said a further repositioning of the NZ dollar continued to be the most likely option as it exited the last week of the effective trading year. Moves in the coming two weeks were likely to be more erratic.

Support levels continued to remain under threat of exposure as markets looked for reasons to weaken the NZ dollar.

The US dollar reversed earlier declines to rally against the euro and yen amid rising bond yields after a report unexpectedly showed factory activity in the US Mid-Atlantic region rose in December.

NZPA

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