NZ dollar falls on current account data

The New Zealand dollar fell today after weaker than expected current account data but it rose against a weak euro.

The NZ dollar was US70.37c at 5pm from US70.54c at 8am and US70.72c at 5pm yesterday.

The currency rose to around US70.80c in morning trading but gapped down to around US70.40c after current account data was released.

Statistics New Zealand (SNZ) reported a seasonally adjusted current account deficit of $3.1 billion in the three months to December. That follows a $39 million surplus in the September quarter, the first surplus in 20 years.

The deficit was significantly larger than the market expected, Westpac said.

The large turn around between the September and December quarters was driven by a rise in the income earned from foreign investment in this country, SNZ said. Tax transactions in the banking sector in the June and September quarters had reduced the current account deficit.

"Now we are leading into gross domestic product data tomorrow," one dealer said. "We haven't broken out of a range we've been in the last three days," he said.

Swings in risk appetite and in the euro against the greenback kept most currencies volatile overnight. In Asian trading today the euro fell to an all time low against the Swiss franc and to a near 10 month low against the dollar as investors worried about Greece's finances ahead of a European Union summit.

The NZ dollar rose to 0.5230 euro at 5pm from 0.5216 at the same time yesterday. It was at 63.67 yen from 63.86 yen yesterday and was at A76.73c from A77.10c.

The trade weighted index was 65.28 at 5pm from 65.38 yesterday.

- NZPA