NZ dollar affected by global growth worries

The New Zealand dollar firmed slightly today after being affected during the weekend by global growth worries.

Around 5pm the NZ dollar was buying US69.00c, up slightly from US68.84c at 8am. During the weekend it had eased from US69.40c at 5pm on Friday, even as the US dollar extended steep losses against the euro on concerns about economic recovery in the United States after disappointing US jobs data.

The US dollar held as its lowest level in nearly two months today.

Friday's monthly jobs report showed the US economy shed 125,000 jobs in June, which followed weak reports on consumer spending and factory activity last week. The US market is closed on Monday for a holiday and there is little on the New Zealand financial diary this week.

"The correlation with the equity market continues to be the underlying consistent factor for the NZ dollar but the correlation is not as sequential as it once was with delays and spikes providing opportunities," ANZ said in a commentary.

"The correlation between the euro and the NZ dollar has fallen as US debt levels continue to grow and the market prefers austerity to the US's call for more spending and stimulus," ANZ said.

The NZ dollar dropped to a one-month low against the European currency around 0.5470 early on Saturday, and by today's local close was at 0.5501, which was still down from 0.5546 at 5pm on Friday.

It also dropped to 60.39 yen at 8am today from 61.01 at Friday's local close, but was 60.66 by 5pm.

Against the Australian dollar it peaked at a nine-month high above A82.40c early Saturday but then fell away to A81.75c at 8am today, slightly lower than at 5pm on Friday and was A81.79c by 5pm today.

Last week the Australian Government and major mining companies agreed to a watered down mining tax, easing concerns the tax would hurt business investment.

The trade weighted index fell to 66.14 at 5pm from 66.49 at the same time on Friday.

- NZPA