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The New Zealand dollar slid to a two-week low against the yen as investors shied away from so-called riskier currencies in favour of safe havens.
The kiwi touched 87.43 yen early this morning, its lowest level since April 29, and was trading at 87.73 yen at 8am in Wellington, from 88.43 yen at 5pm yesterday. The local currency weakened to 86.38 US cents from 86.84 cents yesterday.
The Japanese currency strengthened after reports showed lower-than-expected first quarter gross domestic product in Europe, a softer US housing market, an unexpected decline in US industrial production in April, while tensions between the Ukraine and Russia continued. Adding to demand for the yen, the nation's first quarter economic growth exceeded forecasts.
"In times of risk aversion, the New Zealand dollar weakens and the Japanese yen strengthens," ANZ Bank New Zealand senior economist Mark Smith and senior foreign exchange strategist Sam Tuck said in a note. "This cross is showing signs of risk aversion."
The kiwi will probably trade between 87.25 yen and 88.25 yen today, ANZ said.
Today, Prime Minister John Key, Finance Minister Bill English and Economic Development Minister Steven Joyce are speaking to business audiences following the announcement of the 2014 budget yesterday, where the government signalled bigger fiscal surpluses in an economy seen to be growing faster than previously thought.
Traders will also be eyeing US Federal Reserve Chair Janet Yellen's speech to the US Chamber of Commerce, scheduled shortly after 10am New Zealand time today.
The New Zealand dollar weakened to 62.99 euro cents from 63.32 cents yesterday. Euro-area GDP rose 0.2 percent in the first quarter, half as much as economists had forecast, increasing speculation the European Central Bank will add more stimulus at its meeting next month.
The kiwi slipped to 51.43 British pence from 51.77 pence yesterday, and dropped to 92.29 Australian cents from 92.61 cents. The trade-weighted index fell to 80.32 from 80.72 yesterday.