You are using an older browser version. Please use a supported version for the best MSN experience.

Kiwi hits 11-month low on commodity dip

NZ Newswire logoNZ Newswire 4/05/2017 Jonathan Underhill

The New Zealand dollar has extended its decline, briefly reaching an 11-month low overnight, as commodity prices continued to weaken, weighing on currencies tied to prices of raw materials including the Australian dollar.

The kiwi traded at US68.73 cents as at 8am on Friday in Wellington, and earlier dropped to US68.36c, the lowest since June last year, from US68.82c on Thursday. The trade-weighted index declined to 74.80 from 74.95.

The CRB Index of 19 commonly traded commodities fell 1.9 per cent overnight to the lowest since early August, amid signs of weaker demand in China, while crude oil sank almost 5 per cent.

However, the decline in commodity currencies wasn't matched by a stronger US dollar, which fell about 0.5 per cent, based on the US dollar index, to the lowest level in more than a week.

"This week's theme has been weakness in commodity prices, driving down the commodity currencies, and that has continued overnight," said ANZ senior rates strategist David Croy.

He said it was "time for a bounce" in the kiwi, though, because the weakness in commodities has been in materials Australia exports such as iron ore, while New Zealand's commodity prices have held up.

Traders are now looking ahead to the Reserve Bank's survey of expectations on Friday, which will show whether there has been a pickup in where inflation is thought to be heading.

In the US, labour market figures are expected to show the US economy added 190,000 jobs last month, a rebound from a surprisingly weak 98,000 added in March.

Across the Tasman, the Reserve Bank of Australia releases its full monetary policy statement.

On Friday morning, the kiwi traded at 92.66 Australian cents from A92.75c late Thursday. It fell to 4.7361 yuan from 4.7403 yuan and declined to 77.16 yen from 77.60 yen. It slipped to 62.54 euro cents, also an 11-month low, from 63.11c and dropped to 53.13 British pence from 53.39p.

image beaconimage beaconimage beacon