Kiwi falls as faltering global growth erodes risk appetite

The New Zealand dollar fell as weaker economic figures in US and Europe weighed on equity markets and eroded investors' appetite for riskier, higher yielding, assets.

The kiwi sank to 81.03 US cents from 81.67 cents at 5pm in Wellington yesterday. The trade-weighted index fell to 72.68 from 73.11.

The kiwi added to its decline yesterday following weak retail sales after the eurozone's industrial production sank the lowest in more than three years in September and Greece's economy suffered a contraction for the 17th consecutive quarter.

Meanwhile, US Commerce Department data showed retail sales slid more than expected in October.

"Overnight, the NZD/USD resumed its decline as global risk sentiment stuttered," says Mike Jones, currency strategist at Bank of New Zealand. "The recent deterioration in the New Zealand economic backdrop means the NZD/USD is more exposed than usual to any cooling of global optimism."

Weak retail sales and last week's data showing third-quarter unemployment rose to 7.3% has economists pondering whether the economy grew at all in the latest three months.

The Performance of Manufacturing Index is due out today and there are expectations manufacturing remains in contraction.

The kiwi slipped to 78.04 Australian cents from 78.13 cents and traded at 64.91 yen from about 64.90 yen yesterday. It tumbled to 63.52 euro cents from 64.22 cents and fell to 51.08 British pence from 51.41 pence.

(BusinessDesk)

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1 Comment & Question

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With all this money printing and currency devaluation happening around the world it would be the perfect time to scramble out of equities i think. #onlygoingtogetworse

Commodities are where it's at.

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NZ Market Snapshot

Forex

Sym Price Change
USD 0.7785 -0.0048 -0.61%
AUD 0.8853 -0.0020 -0.23%
EUR 0.6219 0.0005 0.08%
GBP 0.4869 -0.0028 -0.57%
HKD 6.0413 -0.0333 -0.55%
JPY 87.4210 1.8540 2.17%

Commods

Commodity Price Change Time
Gold Index 1171.1 -27.000 2014-10-31T00:
Oil Brent 85.9 -0.380 2014-10-31T00:
Oil Nymex 80.5 -0.520 2014-10-31T00:
Silver Index 16.1 -0.310 2014-10-31T00:

Indices

Symbol Open High Last %
NZX 50 5370.2 5405.3 5370.2 0.33%
NASDAQ 4639.4 4641.5 4566.1 1.41%
DAX 9283.4 9339.3 9114.8 2.33%
DJI 17208.8 17395.5 17195.4 1.13%
FTSE 6463.6 6553.4 6463.6 1.28%
HKSE 23913.7 24046.4 23702.0 1.25%
NI225 15817.1 16533.9 15658.2 4.83%