Kiwi dips as US consumer credit drops, Athens aid back in focus
BUSINESSDESK: The New Zealand dollar fell against most of its peers after an unexpected drop in US consumer credit and the Greek prime minister failed to win support from coalition partners on stiff budget cuts, weighing on stocks and sapping investor risk appetite.
The kiwi slipped to 80.83 US cents from 81.16 cents at 5pm yesterday. The trade-weighted index fell to 72.28 from 72.51.
The Standard & Poor's 500 Index was down about 0.6% heading into the close of trading after Federal Reserve figures showed consumer credit fell by $US3.28 billion in July against expectations in a Bloomberg survey of a $US9.2 billion gain.
That added to negative sentiment ahead of what is shaping up to be "Big Wednesday" in Europe, where the German Constitutional Court is to rule on participation in a permanent aid fund for indebted eurozone members.
One of the neediest recipients, Greece, is back talking to creditors and Prime Minister Antonis Samaras has scheduled further meetings with coalition partners to try to break their impasses.
US consumer credit "was massively lower than expected" and "added to the downward movement" in the kiwi, says Stuart Ive, a strategist at HiFX. "There could be a bit of a playoff between Germany and Greece, adding a bit of downward sentiment."
He says the kiwi dollar may trade in a range of 80.40 US cents to 81.30 cents today.
More evidence of the pace of the New Zealand economy comes today with electronic card transactions for August and QV property values for August.
The kiwi fell to 72.28 Australian cents from 72.51 cents and slipped to 63.25 yen from 63.50 yen. It dropped to 63.30 euro cents from 63.50 cents and declined to 50.55 British pence from 50.73 pence.