Kiwi dips to new decade low against Aussie

Thursday 23rd December 2010

The New Zealand dollar dropped to a new decade low against the Australian dollar which spent part of the overnight session above parity with the greenback.

From A74.41c against the Australian dollar at 5pm yesterday, the kiwi was at A74.19c by 8am, having dipped to around A74c a few minutes earlier, according to Reuters data.

The NZ dollar was little changed against the US dollar at US74.17c, while rising to 0.5666 euro at 8am from 0.5647 at 5pm.

BNZ currency strategist Mike Jones said currency markets were "a bit of a snooze-fest" overnight, with the lack of any clear direction keeping the NZ dollar contained in an "extraordinarily tight" range between US74.10c and US74.50c.

There was relatively more action in the NZ dollar against the aussie, Jones said.

With investors generally wary of adding to NZ dollar positions ahead of third quarter GDP data at 10.45am today, the Australian currency tended to benefit relatively more from modest gains in commodity prices.

The NZ dollar slipped to 62.02 yen at 8am from 62.14 at 5pm, while the trade weighted index dropped to 67.14 from 67.19.

The euro dropped to a record low against the Swiss franc for the sixth straight day, with losses accelerating on concern the euro zone debt crisis will continue well into 2011.

"We view the surging Swiss franc heading into year end as an ominous warning sign for further trouble ahead in the euro zone in early 2011," said Lee Hardman, currency economist at the Bank of Tokyo-Mitsubishi UFJ in London.

NZPA

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