The New Zealand dollar extended its decline as stocks across Asia followed a souring global mood with uncertain elections in Italy and divisions appearing in the Federal Reserve's strategy to buy unlimited bonds.
The kiwi fell to 83.38 US cents at 5pm in Wellington from 83.57 cents at 8am and 84.08 cents yesterday. The trade-weighted index decreased to 76.23 from 76.33 yesterday.
Stocks in Asia fell, with China's Shanghai Composite Index down 2.7 percent, Japan's Nikkei 225 index falling 1.3 percent and Australia's S&P/ASX 200 index down 2 percent.
Market sentiment has turned around since US stocks touched five-year highs as investors get nervous about this weekend's Italian election that could throw a spanner into Prime Minister Mario Monti's austerity drive.
Today's release of minutes to the latest Federal Open Market Committee meeting did to give them confidence, showing division over the pace of monthly purchases, and some officials raised the potential costs of the eventual exit from the quantitative easing programme.
"There's a bit or nervousness after it looked like it was all one-way traffic," says Imre Speizer, market strategist Westpac Banking in Auckland. "If we break below 83 US cents then it's more sinister, the trend is broken and we go lower to 81 at a minimum."
New Zealand's currency tumbled yesterday after Reserve Bank governor Graeme Wheeler said the kiwi was over-valued and reminded the market of his criteria for intervention. The currency has been in favour in recent months as investors look for higher interest rates in growing economies.
The kiwi rose to 62.88 euro cents from 62.67 cents yesterday, and increased to 54.81 British pence from 54.43 pence. It advanced to 81.43 Australian cents from 81.14 cents, and traded at 77.90 yen from 78.54 yen.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Soccer shocker: beIN won't launch standalone streaming service in NZ
- Adrift in a sea of violence: Obama’s legacy, and the prospect of a Trump or Clinton presidency
- Carry on: Air NZ farewells B767, upgrades business cabins and more
- Pain and gain of Rogernomics remembered in US-made documentary
- King’s gambit turns rump into trump
Most listened to
- Business Week in Review with Grant Walker & Andrew Patterson
- “Cut the cuteness about cannabis reform” - Matthew Hooton
- Rodney Hide thinks Winston Peters will be the future Maori king
- Ethical investment in Kiwisaver - David Cohen vs. Matt Nippert
- Hunter’s Corner: Time for a line in the copyright sand