The New Zealand dollar fell as upbeat US and Australian economic data sapped demand for the kiwi, and after another drop in dairy prices eroded confidence in the strength of the nation's biggest export commodity.
The local currency fell to 82.94 US cents at 5pm in Wellington from 83.14 cents at 8am and 83.46 cents yesterday. The trade-weighted index declined to 78.63 from 79.02.
Australia's economy grew at a 0.5 percent pace in the three months ended June 30, slowing from 1.1 percent in the March quarter, according to the Bureau of Statistics. That was ahead of economists' forecasts, and boosted demand for the Australian dollar at the kiwi's expense. Separately, Reserve Bank of Australia governor Glenn Stevens said he was unwilling to boost housing any further to try and lift the jobless rate, which analysts interpreted as meaning the central bank won't cut rates again. The kiwi fell to 89.38 Australian cents from 89.79 cents yesterday.
The local currency was already under pressure from stronger US manufacturing figures, which supported growing expectations for the Federal Reserve to lift rates earlier and faster, and also a drop in dairy product prices to the lowest level in more than two years at the latest GlobalDairyTrade auction.
"All four things conspired to drive the kiwi lower," said Sam Tuck, senior FX strategist at ANZ Bank New Zealand in Auckland. "New Zealand's yield is still attractive, and while it doesn't arrest the slide, what it does mean is that the (kiwi's) fall is more grinding in nature."
ANZ's Tuck said the improving data from the US means traders will watch the Federal Open Market Committee's meeting in two weeks for any sign the Fed plans for an early rate hike, with the US dollar enjoying broad support.
New Zealand government data today showed building activity edged up in the second quarter, with a pick-up in non-residential work offsetting flat construction in the housing sector. Separately, a private realtor's survey showed lower house sales in the country's biggest city in the lead-up to this month's general election.
The local currency fell to 87.27 yen at 5pm in Wellington from 87.44 yen yesterday, and dropped to 63.19 euro cents from 63.61 cents. It edged up to 50.40 British pence from 50.33 pence after a poll yesterday showed growing support for Scottish independence ahead of a referendum in two weeks on a possible split.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- In his Editor’s Insight, Nevil Gibson reveals New Zealand has moved up one place world competitiveness
- Political Editor Rob Hosking on the Labour Greens Cuddle up
- G3 CEO Mark Brightwell on the mail company's expansion plans
- In his Editor’s Insight, Nevil Gibson says the economics and politics of Argentina in the 1950s make interesting parallels with today
- Partners Life founder Naomi Ballantyne tells NBR Radio what Blackstone's investment means for the company's IPO plan