The New Zealand dollar fell today along with the Aussie after officials at Moody's Investors Service said China could face another credit rating downgrade if it doesn't contain its debt mountain, and both currencies were hurt by falling commodity prices.
The kiwi declined to US70.14c as at 5pm from US70.41c late yesterday and was up about 1.3 per cent from a week ago. The trade-weighted index was little changed at 75.87 from 75.98 yesterday.
Moody's official Li Xiujun said in a webcast that China may not be able to hold onto its A1 credit rating if the nation's debt grows at a faster pace than the ratings agency anticipates.
The webcast follows Moody's decision this week to cut China's rating to A1 from Aa3, earning a rebuke from the world's second-largest economy, with the finance ministry describing Moody's as "sloppy" and its move based on inappropriate methodology.
The Australian dollar fell more than the kiwi on the news, on the basis that it is more exposed to changes in China's fortunes and demand for its iron ore and coking coal.
