NZ dollar falls to fortnight low

Photo / Dean Purcell

The New Zealand dollar fell to a fortnight low against its Australian counterpart in a generally unspectacular overnight session.

Euro zone concerns continued to dominant the market, while a larger-than-expected dip in new claims for unemployment benefits in the United States raised hopes the US labour market may have turned a corner.

The kiwi dropped to as low as A77.38c early today, its lowest level since November 10, and by 8am was at A77.50c, from A77.87c at 5pm.

The NZ dollar was also buying US76.22c against the greenback at 8am, similar to its 5pm level, having ranged between about US76.40c and US75.80c.

ANZ bank said the NZ dollar was offered some assistance when key euro support levels held, with the kiwi turning positive overnight.

Despite an expected struggle, the NZ dollar should remain relatively strong as yield and offshore demand hold support levels, ANZ said.

The Thanksgiving holiday in the US was likely to see light trading that should help keep the kiwi within recent ranges.

BNZ markets strategist Mike Jones said there had been demand from commercial and sovereign investment flow for some currencies, including the kiwi and aussie.

Worries that Ireland's fiscal crisis could spread to other euro-zone countries drove the euro down to a two-month low beneath $US1.33, and traders said the currency is probably in for more losses in the days ahead.

Though it traded in a wide range and had recouped most of its losses by midday in New York, traders attributed that to low volume ahead of a US market holiday for Thanksgiving on Thursday. The euro was still down 2.7 percent against the US dollar since the start of the week and is down 4.4 percent so far in November.

The NZ dollar rose to 0.5711 euro at 8am from 0.5691 at 5pm, and edged up to 63.63 yen from 63.45. The trade weighted index was at 68.74 at both 8am and 5pm.

- NZPA