The New Zealand dollar fell alongside the Australian and Canadian dollars on concern slowing growth in China would reduce demand for the countries' commodities.
The kiwi slipped to 81.28 US cents at 8am in Wellington, from 81.56 cents at 5pm yesterday, while the Australian dollar fell to 88.75 US cents
from 89.35 cents, and the Canadian dollar dropped to 90.64 US cents from 91.41 cents.
The Bloomberg Commodity Index declined to the lowest level since July 2009, after China's finance minister indicated the country won't increase stimulus measures to bolster growth. Chinese Finance Minister Lou Jiwei made the comments at the weekend meeting in Cairns, Australia, of finance ministers and central bank governors from the G20 countries. Lou said that there won't be major policy changes in response to individual economic indicators, damping prospects for a stimulus boost.
"Markets are a little worried about Chinese activity and their demand for commodities," said Sam Tuck, senior foreign exchange strategist at ANZ Bank New Zealand. "It looks like things are slowing there and therefore their demand for commodities is declining."
Commodity currencies are likely to continue to remain under pressure on Chinese concerns, Tuck said.
Today, all eyes will be on the release of the flash HSBC/Markit manufacturing Purchasing Managers' Index which may show growth stalled this month, adding to worries the economy could be at risk of a sharper slowdown without further stimulus. The PMI likely straddled the boom-bust line of 50 in September, according to the median forecast of economists in a Reuters survey, dipping from August's final PMI reading of 50.2, which was itself a three-month low.
