The New Zealand dollar was little changed as concerns about emerging markets eroded investors' appetite for risky assets after Argentina devalued the peso and Turkey's lira plunged when its central bank intervened in foreign exchange markets.
The kiwi traded at 82.88 US cents at 8am, paring a gain in Northern Hemisphere trading, from 82.84 cents at 5pm in Wellington yesterday. The trade-weighted index dropped to 78.43 from 78.61 yesterday.
Argentina's peso slumped 14 percent to 7.90 per US dollar after policy makers stopped buying foreign currency to prop up the peso in a bid preserve the central bank's reserves, and Turkey's lira weakened 1.6 percent to 2.2934 per US dollar after the nation's central bank in a bid to shore up the currency. That raised fears about the strength of emerging economies, which were already on the back foot after a weaker than expected Chinese manufacturing report yesterday.
"It's been a while since we've had an old-fashioned risk-off day and that's what this is," said Sam Tuck, senior FX strategist at ANZ New Zealand in Auckland. "That's why the kiwi's off from above 83 (US cents)."
The currency may trade between 82.20 US cents and 83.20 cents today, according to ANZ economists.
ANZ's Tuck said the fears over emerging markets weighed more heavily on the Australian dollar than the kiwi, which rose to 94.59 Australian cents from 94.03 cents yesterday.
Investors will note the Reserve Bank's December credit card spending figures for release today.
The local currency fell to 60.54 euro cents at 8am in Wellington from 61.06 cents yesterday after better than expected European manufacturing figures bolstered confidence in the eurozone's economy.
The kiwi fell to 85.48 yen from 86.37 yen yesterday, and slipped to 49.85 British pence from 49.93 pence.
(BusinessDesk)
Paul McBeth
Wed, 11 Jul 2018
Wed, 11 Jul 2018
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Risk-off suddenly in vogue for kiwi dollar as emerging market concerns stifle risk appetite
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