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NZ dollar falls to nine-year low against Aussie

The New Zealand dollar fell to its lowest level against its Australian counterpart in more than nine years, after official interest rates across the Tasman were yesterday raised 25 basis points to 4 percent.The kiwi dropped as low as A76.86c early today,

NZPA
Wed, 03 Mar 2010

The New Zealand dollar fell to its lowest level against its Australian counterpart in more than nine years, after official interest rates across the Tasman were yesterday raised 25 basis points to 4 percent.

The kiwi dropped as low as A76.86c early today, according to Reuters data, falling from A77.54c at 5pm yesterday. Around 8am the NZ dollar was buying about A77.02c.

The NZ dollar also slipped overnight against the euro and yen, but after a bumpy night was back at a similar level against the greenback as it had been at the local close, at US69.76c around 8am.

ANZ bank said yesterday's decision by the Reserve Bank of Australia to lift the Australian cash rate cushioned dips for the NZ dollar which was supported on profit taking from recent positioning.

The kiwi had tried to follow the Australian dollar higher overnight, but lagged as expected, ANZ said.

BNZ strategist Mike Jones said that despite a generally positive night for risk appetite and equity markets, the NZ dollar was hamstrung against the greenback by the New Zealand currency's weakness against the Australian dollar.

He suspected the NZ dollar was close to finding a bottom against the aussie.

"Australia is clearly in better shape than NZ at present, but this can't last forever. A narrowing in Australia's growth advantage this year is expected to see NZD/AUD recover, albeit gradually," Mr Jones said.

Around 8am the NZ dollar was buying 0.5124 euro from 0.5152 at 5pm, and was down to 61.82 yen from 62.26 at the local close. The trade weighted index was down to 64.45 at 8am from 64.69 at 5pm.

The NZ dollar remained near quarter century highs against the British currency at 46.60p at the local open after sterling tumbled on fears of the potential for a hung Parliament in Britain.

The euro rebounded from a 9-1/2-month low against the US dollar as investors awaited new plans to address Greece's debt crisis and held out hope for some type of help from the European Union.

NZPA
Wed, 03 Mar 2010
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NZ dollar falls to nine-year low against Aussie
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