Free audio stream, including stories that are padlocked on our site. Listen on any device, anywhere. Updated twice daily. The audio stream takes several seconds to start on Android devices.Launch Radio player
The New Zealand dollar edged lower in abbreviated local trading as stalled negotiations to stave off $US600 billion in tax hikes and Federal spending cuts erode investor optimism the day before the Christmas holidays.
The kiwi fell to 82.15USc at 1.30pm in Wellington from 82.32USc at 8.30am and 82.37USc on Friday in New York. The trade-weighted index declined to 73.56 from 73.69 last week.
Trading was light as New Zealand markets were open for a shortened session on Christmas Eve.
Investors have pared back their hopes US legislators will set aside partisan differences and reach a deal to avert the fiscal cliff, which will likely plunge the world's biggest economy back into recession. The stalemate is nearing crisis point with politicians set to come back after Christmas to find a solution before the changes are enacted on January 1.
"There's no progress on the fiscal cliff and that doesn't augur well for things," said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional. The kiwi dollar may drift towards 81.75/82USc, "but it's not about to break through the range."
The decline in the Australian and New Zealand dollars was exacerbated by the biggest speculative long positions since 2003 in the currencies, Mr Kelleher said. That makes them more vulnerable to a sell-off when US equities declined.
The New Zealand dollar traded at ¥69.33 from ¥69.36 on Friday in New York, and edged down to 79.07Ac from 79.12Ac last week. The currency was little changed at €0.62.55 from €0.62.49 on Friday in New York, and traded at 50.85p from 50.96p.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Rodney Hide is wrong on climate change
- Don’t laugh: Winston’s plan to be PM
- Crying wolf as climate change takes a ‘hiatus’
- The Moxie Sessions: Will the last person out of Ohura please turn out the lights (but for the love of God don’t unplug the navigation beacon)
- Carry on: 250 A320s for EasyJet, lower Changi fees and more