Dollar tumbles a second day after China weakens yuan fixing again
Another round of yuan fixing weakens NZ dollar.
The New Zealand dollar dropped to a new six-year low after China's central bank lowered its yuan fixing for a second day.
The move is driving down the currency of the country's biggest trading partner and making it tougher for exporters.
The kiwi fell as low as 64.65USc, the lowest since July 2009, and was recently at 65.01c, down from 65.52c yesterday. The local currency rose to 4.1802 yuan from 4.1396 yuan yesterday.
The Australian and New Zealand dollars dropped sharply after the People's Bank of China set the yuan fixing at 6.3306 against the greenback, 1.6% down on yesterday, when it set the midpoint for the yuan at 6.2298 per dollar.
The currencies had tumbled yesterday when the PBOC said it was aiming for 2% depreciation. China is New Zealand's biggest trading partner, and second biggest export destination behind Australia, meaning a weaker yuan will crimp export receipts in the world's most populous nation.
The weaker fixing effectively "increases the cost of exports to China" for countries that rely on that market, such as Australia and New Zealand, says Hong Kong-based RBC Capital Markets senior currency strategist Sue Trinh. "The fix was a lot lower again from where it was yesterday."
The local currency rose to 89.73Ac from 89.44c yesterday, and fell to 81.37 yen from 81.68 yen. It tumbled to 58.74 euro cents from 59.67c yesterday, and fell to 41.77 British pence from 42.07 pence. The trade-weighted index was little changed at 70.30 from 70.32 yesterday.
(BusinessDesk)
Jonathan Underhill
Wed, 12 Aug 2015
Wed, 12 Aug 2015
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Dollar tumbles a second day after China weakens yuan fixing again
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