Kiwi may slide further on speculation EU leaders won't agree

BUSINESSDESK: The New Zealand dollar may fall further on speculation European Union leaders will fail to agree on measures to stop the region’s debt crisis from spreading.

They will late tomorrow attend their 20th summit since the turmoil began.

The kiwi traded at 78.97 US cents at 5pm down from 79.20 US cents just before 8am. The trade weighted index decreased to 71.67 from 71.87.

German Chancellor Angela Merkel and French President Francois Hollande will meet ahead of the summit.

The chancellor is under pressure to do more to stem the crisis despite reiterating the view that she “doesn’t see” shared debt in the euro area.

The summit will also be the first since Greece’s pro-bailout parties secured a coalition following elections on June 17.

"The fate of the kiwi will be in the hands of general market sentiment," said Alex Hill, senior currency strategist at HiFX.

"The longer the kiwi stays below 80 US cents the more chance we have of seeing some lower levels – there has been some pretty poor rhetoric out of Europe."

Mr Hill said the New Zealand dollar is likely to trade in a range of 78.60 US cents to 79.40 cents overnight.

In the US, ther world's largest economy, durable goods orders are released later tomorrow and the latest statistics for gross domestic product and jobless claims the next day.

The kiwi was little changed after New Zealand’s trade surplus narrowed in May, as expected, as imports rose faster than exports, widening the annual deficit.

The monthly surplus was $301 million last month, down from a revised $335 million in April, Statistics New Zealand says.

National Bank's Business Outlook survey is due out tomorrow morning.

The New Zealand dollar fell to 78.46 Australian cents from 78.60 cents and slipped to 62.74 yen from 62.87 yen.

It dropped to 63.16 euro cents from 63.31 cents and was largely unchanged on 50.51 British pence from 50.55 pence.