NZ dollar falls on talk of double dip recession
The kiwi pushed to its highest level against the greenback in nearly a week in early trading but then drifted lower.
The New Zealand dollar fell today after Finance Minister Bill English spoke about the possibility of a double-dip recession.
The NZ dollar had pushed to its highest level against the greenback in nearly a week in very early trading and was drifting lower when it reacted to comments Mr English made to a parliamentary committee.
The NZ dollar was at 77.13USc at 5pm, down from 77.53USc at 8am and the 7.90USc it reached at 6.45am. It was down from 77.20USc at 5pm yesterday.
The market was "long," meaning many traders held long positions, before Mr English spoke.
While local investors took the view that Mr English was managing expectations after the economy contracted 0.2% in the September 2010 quarter, foreign investors reacted to the comments.
The US dollar has been weaker as investors ventured away from safe-haven currencies after tensions in Egypt eased.
A surprise 25-basis point Chinese rate hike -- at midnight (NZ time) -- did little to disrupt upbeat sentiment that had characterised financial markets of late.
An attempt by Prime Minister John Key yesterday to jawbone the NZ dollar, reiterating the headwinds faced by this country's export sector from the strengthening kiwi, had earlier only a fleeting effect on the currency.
The NZ dollar reached a three-week high against the euro at €0.5710 about 10pm yesterday, then fell away to €0.5652 by 5pm, which compared with the €0.5671 at the same time yesterday.
Against the aussie, the NZ dollar fell to 76.08Ac at 5pm from 76.37Ac at 8am from 76.11Ac at 5pm yesterday, and was little changed at ¥63.56 from ¥63.54. The trade weighted index was little changed at 68.51 from 68.54 yesterday.
NZPA
Wed, 09 Feb 2011
Wed, 09 Feb 2011
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NZ dollar falls on talk of double dip recession
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