Kiwi slips 7.9% in May as Europe saps risk appetite
The New Zealand dollar is poised for a 7.9% decline as fears about Spain's banking sector and the prospect of Greece quitting the euro weigh on appetite for higher-yielding, riskier assets.
BUSINESSDESK: The New Zealand dollar is poised for a 7.9% decline over May as fears about Spain's banking sector and the prospect of Greece quitting the euro weigh on appetite for higher-yielding, riskier assets.
The kiwi was little changed at 75.36 US cents at 5pm from 75.40 cents at 8am, and down from 76.03 cents yesterday.
The trade-weighted index fell to 69.07 from 69.48 yesterday, and is poised for a 5.1% decline this month.
New Zealand's currency shed more than six US cents in May as Europe's sovereign debt woes escalated. That nervousness is expected to see investors hold off making their end-of-month positioning, where they reset their asset allocations, until next week after US employment and Chinese manufacturing data tomorrow.
"Investors are sitting on their hands in the short-term as we go through month-end and a swathe of US data," said Mike Jones, currency strategist at Bank of New Zealand. "The kiwi will probably go lower next month, but not at the same speed we've seen in May."
New Zealand business confidence fell for the first month in seven in the latest National Bank Business Outlook, while export intentions fell to a three-month low.
The survey came out a day after the New Zealand Institute of Economic Research’s quarterly forecasts, which painted a tepid recovery with growth forecast at just 1.5% this year.
The New Zealand dollar was little changed at 60.84 euro cents from 60.98 cents yesterday, and unchanged at 48.68 pence. It traded at 77.57 Australian cents and dropped to 59.35 yen from 60.41 yen.
Paul McBeth
Thu, 31 May 2012
Thu, 31 May 2012
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Kiwi slips 7.9% in May as Europe saps risk appetite
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