The kiwi fell to a fresh 3½-month low on concerns leadership changes in France and Greece will hamper efforts to resolve the region's sovereign debt crisis, sapping investor demand for high-yielding assets.
BUSINESSDESK: The kiwi fell to a fresh 3½-month low on concerns leadership changes in France and Greece will hamper efforts to resolve the region's sovereign debt crisis, sapping investor demand for high-yielding assets.
The New Zealand dollar fell to 79.20 US cents at 5pm, down from 79.33 cents at 8am and 79.54 cents at the close of trading in New York on Friday.
It fell as low as 79.09 US cents, the lowest since January 13.
The trade weighted index declined to 71.03 from 71.08 last week.
Europe is still the main issue for financial markets, with early projections in the Greek elections showing the two biggest parties will fall short of the 300-seat majority needed to rule, after the neo-Nazi Golden Dawn party secured 6.9% of the vote.
In France, successful presidential challenger Francois Hollande won about 52% of the vote, defeating the incumbent Nicolas Sarkozy.
It is the first time in 30 years that a president has failed to win re-election.
"Overall, it's a negative story for the kiwi - the election results have created more political uncertainty so investors are feeling more concerned about the outlook for Europe," said Dan Bell, currency strategist at HiFX.
The New Zealand dollar rose to 61.06 euro cents from 60.68 at 8am amid speculation Mr Hollande will not yield to already-agreed austerity measure across the Euro zone.
He was elected on a platform which called for higher taxes, increased spending and a delayed deficit-reduction effort.
In Australia, New Zealand's largest trading partner, retail sales rose 0.9% in March up from 0.3% a month earlier, according to Sydney's statistics office.
The median forecast in a Bloomberg survey was for a 0.2% increase. Separately, a report showed building approvals climbed 7.4% in March from February.
"The Australian data was strong and mostly better than expected and we haven't seen a huge amount of movement in the Australia/New Zealand cross," Mr Bell said.
The Australian Federal government is also preparing to release its budget tomorrow in Canberra about 9.30pm New Zealand time.
"The fiscal situation in Australia and New Zealand isn't as strong as it has been so monetary policy may well have to step up going forward," he said.
Last week, the Reserve Bank of Australia cut the target cash rate half a percentage point to 3.75%, while some traders have delayed their expectations for a hike by New Zealand's central bank into next year.
The official cash rate here is at a record-low 2.5%.
Six analysts surveyed in BusinessDesk poll all predicted the kiwi dollar will finish the week lower, and at the bottom end of this week's trading range of 77 cents to 81 cents.
There was no significant data released in New Zealand today.
The government’s financial statements for the nine months ended March 31 are scheduled for release tomorrow.
The kiwi rose to 78.21 Australian cents from 77.99 cents last week. It fell to 49.10 British pence from 49.39 pence and dropped to 63.19 yen from 64.66 yen.
