The New Zealand dollar dipped to multi-month lows, then rebounded, as traders favoured the kiwi over the Aussie, on expectations Australia will be hit harder by a slowing Chinese economy and sluggish commodity prices.
The kiwi dropped to 63.79 US cents, its lowest since Sept. 30 last year, and was trading at 64.20 cents at 8am in Wellington, from 64.62 cents at the New York close and 64.32 cents on Friday. The trade-weighted index was at 71.10 from 71.07 on Friday.
The New Zealand dollar dropped along with other commodity-linked currencies early in the weekend as Iran looks to ramp up its oil exports following the lifting of sanctions, which is likely to add to the existing glut where supply outweighs demand and weighing on the price of oil.
Commodity currencies are also being hurt by continued concern about a slowdown in China's economy, although the kiwi rebounded as traders favoured the local currency over the Aussie, given Australia's economy is likely to dented by weaker exports of hard commodities to its largest market.
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