New Zealand dollar declines as commodity currencies fall out of favour
Commodity currencies remain under pressure.
The New Zealand dollar declined as commodity-linked currencies fell out of favour over concerns about global growth after oil prices dropped.
The kiwi slipped to 67.31USc at 8am in Wellington, from 67.48c at 5pm yesterday. The trade-weighted index was little changed at 72.34 from 72.33 yesterday.
The US dollar index, which measures the greenback against a basket of currencies, advanced as investors favoured less risky assets following a drop in oil prices after US crude inventories hit a six month high.
Other commodities such as gold, base metals and iron ore also dropped, weighing on commodity-linked currencies such as the kiwi.
"Commodity currencies remained under pressure after a rise in US crude inventories dragged oil prices lower," ANZ Bank New Zealand senior economist Sharon Zollner and senior FX strategist Sam Tuck say.
"We expect the US dollar to continue to recover and for downward pressure on commodity currencies to continue."
ANZ expects the kiwi to trade between 66.80USc and 67.60c today.
Finance Minister Bill English is scheduled to present a keynote address at the Citi Australian and New Zealand Investment Conference in Australia today.
The New Zealand dollar advanced to 93.14Ac from 92.81c yesterday ahead of the release of Australian third-quarter business confidence today.
The local currency was little changed at €59.35c from 59.38c yesterday ahead of the European Central Bank's policy decision today. While no change is expected, some analysts expect ECB president Mario Draghi to hint at plans for further easing.
The kiwi was broadly unchanged at 43.63 British pence from 43.68 pence yesterday ahead of UK September retail sales data today.
The New Zealand dollar weakened to 80.73 yen from 80.89 yen yesterday after a report showed Japanese exports grew at the slowest pace since mid-2014. The local currency also slipped to 4.2733 yuan from 4.2788 yuan yesterday.
(BusinessDesk)
Tina Morrison
Thu, 22 Oct 2015
Thu, 22 Oct 2015
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New Zealand dollar declines as commodity currencies fall out of favour
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