NZ dollar falls as commodity prices weaken; ECB keeps policy unchanged
The New Zealand dollar fell to a 10-month low as weaker commodity prices restrained the currencies of countries that export raw materials, while the European Central Bank kept its policy settings unchanged as expected.
The kiwi traded at 68.78 US cents as at 8am in Wellington, and earlier touched 68.45 cents, the lowest since June last year, from 69.10 cents late yesterday. The trade-weighted index sank to 74.77 from 75.05.
The CRB Index of commonly traded commodities fell 0.7 percent to a five-month low overnight while yesterday Fonterra Cooperative Group said its milk collection "improved in March with better growing conditions across New Zealand," recording an 8 percent gain from the same month last year to 147 million kilograms of milk solids. Milk collection had been declining this season, helping underpin prices for milk powders. Meanwhile, the market focus overnight was on the ECB, which reiterated its intention to keep interest rate low for an extended time.
"The NZD remains unloved and has probed important technical support levels," said Jason Wong, currency strategist at Bank of New Zealand, in a note. "We'll call 0.6850 as a key support level. A sustained break of that would mean a gap to the next support level of 0.6675."
Traders will be watching for data on March building permits and merchandise trade this morning, and the ANZ Business Outlook for April.
The kiwi fell to 63.22 euro cents from 63.37 cents late yesterday and declined to 53.23 British pence from 53.70 pence. The local currency fell to 92.02 Australian cents from 92.32 cents, fell to 4.7402 Chinese yuan from 4.7651 yuan and declined to 76.48 yen from 76.87 yen.