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NZ dollar falls to new six-month low

NZ Newswire logoNZ Newswire 20/12/2016 Rebecca Howard
The kiwi held up fairly well against the Australian dollar. © Reuters The kiwi held up fairly well against the Australian dollar.

The New Zealand dollar hit fresh six-month lows on Tuesday in the face of a stronger US dollar as Donald Trump was confirmed as the next US president.

The kiwi declined to 69.30 US cents as at 5pm in Wellington from 69.79 cents late Monday. It touched a low of 69.13 earlier in the session. The trade-weighted index fell to 77.21 77.58 on Monday.

The main driver across the region continued to be the stronger greenback, as the US electoral college confirmed Donald Trump as the nation's 45th president.

Trump's promises of tax cuts and increased spending have been shoring up the greenback along with the Federal plans to raise interest rates faster than the market had expected.

The kiwi's "been weak for the last two or three days. It looks like it got sold on momentum once it broke through the November low of 0.6975 (US cents)," with the move exacerbated by thin pre-Christmas trading, said ASB head of FX institutional sales New Zealand Tim Kelleher.

The kiwi held up fairly well against the Australian dollar on the day, which was harder hit by a fall in other Asian currencies such as the Malaysian Ringgit, he said.

The local currency traded at 95.45 Australian cents from 95.5 cents late Monday. It slipped to 4.8166 yuan from 4.8182 yuan and was at 81.25 yen from 81.24 yen. It traded at 66.54 euro cents from 66.66 cents and was at 55.85 British pence versus 55.91 pence.

New Zealand's two-year swap rate was unchanged at 2.38 per cent, and 10-year swaps were down two basis points at 3.55 per cent.

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