Kiwi lifts back above 81 US cents after sliding on dwindling risk appetite

The New Zealand dollar traded back up above 81 US cents after falling overnight amid concern about the American fiscal cliff and a flare-up in tensions between Israel and the Palestinians.

The kiwi traded at 81.22 US cents, little changed from the start of the day, and up from as low as 80.86 cents overnight. The trade-weighted index was at 72.75 from 72.77.

US President Barack Obama is trying to build support for a way through the so-called fiscal cliff ahead of a November 16 meeting with congressional leaders.

If Congress does not act by the end of the year, some $US607 billion in spending cuts and tax increases take effect in January, threatening US economic growth.

Meanwhile, Israeli jets struck the Gaza Strip in retaliation for rocket attacks into Israel.

"There's a bit of negative sentiment weighing on the kiwi," says Dan Bell, currency strategist at HiFX. The currency "found support around the 80.80 mark" helping push it back over 81 cents.

The overnight decline was exacerbated by falling stocks on Wall Street, which added to the risk-off tone in currency markets.

"Equity markets in the US are looking quite vulnerable to more downside," Mr Bell says.

The New Zealand dollar has fallen from as high as 82.79 US cents at the start of the month as a run of data pointing to a weaker domestic economy had traders lifting bets on a rate cut by the Reserve Bank.

Third-quarter gross domestic product is due out just before Christmas, though already the jobless rate has climbed back to 7.3% and retail shrank in the third quarter.

Today, surveys showed consumer confidence improved in November, while the Performance of Manufacturing Index rose to 50.5, returning to a level that indicates expansion.

The kiwi slipped to 64.99 yen from 65.06 yen at the start of the day and rose to 78.11 Australian cents from 78.03 cents. It gained to 63.63 euro cents from 63.54 cents and was little changed at 51.14 British pence.

(BusinessDesk)


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NZ Market Snapshot

Forex

Sym Price Change
USD 0.7314 0.0013 0.18%
AUD 0.9585 0.0010 0.10%
EUR 0.6478 0.0010 0.15%
GBP 0.5529 -0.0006 -0.11%
HKD 5.6714 0.0103 0.18%
JPY 73.5200 0.0990 0.13%

Commods

Commodity Price Change Time
Gold Index 1321.2 -4.640 2016-08-25T00:
Oil Brent 49.9 0.030 2016-08-25T00:
Oil Nymex 47.3 0.560 2016-08-25T00:
Silver Index 18.5 -0.070 2016-08-25T00:

Indices

Symbol Open High Last %
NZX 50 7427.8 7430.4 7427.3 -0.48%
NASDAQ 5207.6 5230.6 5217.7 -0.11%
DAX 10512.2 10555.8 10529.6 -0.19%
DJI 18471.2 18497.7 18481.5 -0.18%
FTSE 6816.9 6821.5 6816.9 -0.05%
HKSE 22827.2 22997.4 22815.0 0.41%
NI225 16485.5 16490.5 16556.0 -1.18%
ASX 5541.9 5544.4 5541.9 -0.48%