NZ dollar sinks to three-week low as equities fall, US fiscal talks in focus

Free audio stream, including stories that are padlocked on our site. Listen on any device, anywhere. Updated twice daily. The audio stream takes several seconds to start on Android devices.

Launch Radio player

The New Zealand dollar fell to a three-week low against the greenback after equities weakened and doubts grew on the ability of US Republicans and Democrats to reach agreement on averting the fiscal cliff.

The kiwi dollar slipped to 82.32USc from 82.37USc in New York on Friday and from 83.02USc in Wellington at 5pm on Friday. The trade-weighted index was at 73.69.

On Wall Street, the Dow Jones Industrial Average and the Standard & Poor's 500 Index both fell about 0.9% on Friday and traders were driven to the US dollar and the yen following Republican House Speaker John Boehner's failure to win support from his party for a compromise deal. Senator Joe Lieberman told CNN Boehner's stumble was "the first time I feel it's more likely that we'll go over the cliff than not."

The fiscal cliff talks "seem to be lurching along to a poor ending," said Tim Kelleher, head of institutional FX sales at ASB Institutional.

The decline in the Australian and New Zealand dollars was exacerbated by the biggest speculative long positions since 2003 in the currencies, making them more vulnerable when equities sold off on the back of the fiscal talks, he said. The kiwi dollar may trade in a range of 82-82.75USc today.

Failure to avert the fiscal cliff would mean some $US600 billion of tax increases and spending cuts kick in on January 1.

The New Zealand dollar traded at ¥69.42 from ¥69.36 on Friday in New York, near a two-week low. The local dollar traded at €0.62.45 euro from €0.62.49 and slipped to 50.89p from 50.96p. The kiwi traded at 79.15Ac from 79.12Ac.

(BusinessDesk)


Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

Comments & Questions

Commenter icon key: Subscriber Verified

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7100 0.0000 0.00%
AUD 0.9295 0.0000 0.00%
EUR 0.6459 0.0000 0.00%
GBP 0.4645 0.0000 0.00%
HKD 5.5084 0.0000 0.00%
JPY 88.1490 0.0000 0.00%

Commods

Commodity Price Change Time
Gold Index 1189.4 2.070 2015-05-29T00:
Oil Brent 66.1 -1.110 2015-05-29T00:
Oil Nymex 60.3 2.570 2015-05-29T00:
Silver Index 16.7 0.032 2015-05-29T00:

Indices

Symbol Open High Last %
NZX 50 5777.6 5844.9 5777.6 1.17%
NASDAQ 5093.1 5099.4 5098.0 -0.55%
DAX 11685.7 11704.4 11677.6 -2.26%
DJI 18128.1 18128.1 18126.1 -0.64%
FTSE 7040.9 7069.9 7040.9 -0.80%
HKSE 27398.3 27604.3 27454.3 -0.11%
NI225 20510.3 20636.4 20551.5 0.06%