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

NZ dollar falls to six-week low

NZ NewswireNZ Newswire 10/05/2016 Jonathan Underhill

NZ dollar falls to six-week low © SNPA / Pam Johnson NZ dollar falls to six-week low The New Zealand dollar fell to a six-week low ahead of the financial stability report, which may consider further measures to cool the housing market, removing an impediment to an interest rate cut by the Reserve Bank.

The kiwi dropped to 67.43 US cents as at 5pm, in Wellington, from 68.41 cents late Monday. The trade-weighted index fell to 72.08 from 72.79.

The New Zealand dollar has fallen along with other commodity-linked currencies with the decline in prices of raw materials. The CRB Index, which measures a basket of 19 global commodities, fell about 1.6 per cent overnight.

The kiwi's weakness has also been driven by perceptions that the greenback's recent selloff has been overdone as traders wait for the Reserve Bank's review due at 9am on Wednesday.

"It is unlikely they will announce a new set of restrictions but we think there will be more hints they will do it this year, so the housing market becomes less of an obstacle to cutting the OCR," said Imre Speizer, a strategist at Westpac.

Finance Minister Bill English fanned that speculation when he told reporters that the central bank had "signalled pretty clearly that it takes the issue quite seriously and they've got a range of tools and they're likely to want to use them."

English pointed to Wednesday's stability report and said that would "probably signal direction," reported.

The kiwi traded at 73.36 yen from 73.48 yen late Monday and didn't move much after Japanese Finance Minister Taro Aso said Tokyo was ready to intervene in the currency market if needed. The yen fell to a two-week low against the greenback after his comments.

Westpac's Speizer said with both the yen and the kiwi weakening against the US dollar, the net change in the kiwi-yen cross rate was only moderate.

The New Zealand dollar slipped to 91.93 Australian cents from 92.69 cents yesterday, fell to 59.26 euro cents from 59.96 cents and fell to 46.81 British pence from 47.38 pence. The kiwi fell to 4.3943 yuan from 4.4486 yuan.

The two-year swap rate fell 3 basis points to 2.12 per cent and the 10-year swaps fell 5 points to 2.80 per cent.

image beaconimage beaconimage beacon