The New Zealand dollar troughed at 10-month lows against the greenback and yen overnight, as fearful investors flocked to the two big currencies.The euro plunged to an 8-1/2-year low against the Japanese currency and neared a four-year trough versus the U
The New Zealand dollar troughed at 10-month lows against the greenback and yen overnight, as fearful investors flocked to the two big currencies.
The euro plunged to an 8-1/2-year low against the Japanese currency and neared a four-year trough versus the United States dollar, as Spain's weekend takeover of a small bank fuelled fears of systemic risks within the banking system that could hurt global growth prospects.
A slide in global stock prices and escalating tensions in the Korean peninsula also drove moves by investors, who were attracted by the generally stable financial systems of the United States and Japan and the high liquidity of their currencies.
At its low point the NZ dollar fell to around US65.60c and 58.65 yen, but by 8am was back to US66.87c and 60.28 yen, a little stronger than its level at 5pm yesterday.
Even Fonterra's announcement yesterday of a forecast milk payout for next season that suggested a significant boost for the New Zealand economy, was unable to drive the kiwi up.
ANZ's morning briefing notes said the positive local news could not outweigh the offshore factors influencing the NZ dollar.
But ANZ pointed out that a weaker NZ dollar would place recovery in this country on a better footing and should be viewed as positive in the longer term.
The kiwi fell to A80.99c against the Australian dollar by 8am from A81.33c yesterday, and was little changed at 0.5418 euro at the local open. The trade weighted index was 65.10 at 8am from 65.15 at 5pm.
Sign up to get the latest stories and insights delivered to your inbox – free, every day.
