NZ dollar slides further against euro
The New Zealand dollar fell to a four-month low against a euro buoyed by data showing banks in the euro zone are relying less on funds from the European Central Bank.The euro also hit a fresh five-month high against the US dollar, as developments reinforc
The New Zealand dollar fell to a four-month low against a euro buoyed by data showing banks in the euro zone are relying less on funds from the European Central Bank.
The euro also hit a fresh five-month high against the US dollar, as developments reinforced expectations Europe may gradually remove policy stimulus before the United States and Britain, helping offset concerns about Ireland's fiscal and banking problems.
"The lower level of emergency borrowing combined with the expiration of previous ECB loans reduces the amount of liquidity in Europe's banking system, puts upward pressure on money market rates and signals a gradual normalisation in conditions," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange Inc in Washington.
From 0.5410 euros at 5pm yesterday, the kiwi fell as low as 0.5374 early today, before edging back up to 0.5391 at 8am.
The NZ dollar went through big swings against the greenback overnight, getting up to around US74.10c before diving a cent in 2-1/2 hours to around US73.10c. It then rose to US73.54c at 8am, similar to its level of 5pm yesterday.
ANZ bank said there had been a mixed bag of moves for the NZ dollar as it dutifully followed moves by the euro and Australian dollar.
The inability of the kiwi to hold above US74c had seen a much deeper correction as the US dollar recovered, ANZ said.
The US dollar recouped some losses from a stronger-than-expected reading of business activity in the US Midwest, but the Federal Reserve is still expected to add stimulus to the US economy.
The yen rose broadly on reported exporter demand for the currency on the last day of Japan's fiscal half-year. This sparked talk Japan may step in again to curb yen gains.
The NZ dollar was buying 61.32 yen at 8am from 61.49 at 5pm and was little changed against the Australian dollar at A76.04c. The trade weighted index fell to 66.15 at 8am from 66.28 at 5pm.
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