The New Zealand dollar fell after oil producers failed to reach agreement to freeze production at a weekend meeting in the Qatari capital of Doha, denting demand for commodity-linked currencies.
The kiwi dropped to 68.68 US cents at 8am in Wellington, from 69.15 cents at the New York close and 68.89 cents on Friday. The trade-weighted index weakened to 72.56 from 72.71 on Friday.
Eighteen oil producing nations met in Doha at the weekend to secure a deal to stabilise oil output at January levels in an attempt to stem an oversupply and bolster prices.
However Saudi Arabia said Iran, which was absent from the talks, must take part in the freeze, something the country has refused to do until its production returns to pre-sanction levels. The failure to reach agreement weighed on investor demand for risk-sensitive assets such as equities and commodity-linked currencies such as the kiwi.
"The news of that obviously will put a lot of pressure on commodity currencies as we've already seen this morning and we will also probably see a bout of risk aversion kicking in," said Stuart I've, OMF senior dealer, foreign exchange. "Certainly the pressure will be to the downside for the kiwi as we start this week."
