The New Zealand dollar fell against the greenback ahead of the release of the household labour force survey for the second quarter, with global growth fears continuing to keep markets firmly in risk off mode.
A spate of weaker service sector data from Asia, Europe and the US saw investors' appetite for higher yielding or riskier assets continue to decline, further denting already bruised global equity and commodity markets.
In Europe, the Stoxx 600 Index fell 2 per cent to 251.95, and the 19-commodity Thompson Reuters Jefferies CRB index fell 1.3 per cent to 337.32, its lowest level in a month.
"Equities are pretty fragile and still under pressure, so people who are invested in the market are having to rebalance their hedges to reflect the intra-month magnitude moves in the indices," said Alex Sinton, a senior dealer at ANZ New Zealand. "In this environment we're seeing people selling kiwi, although the currency still remains elevated against the euro, pound and Aussie dollar."
The move lower in the kiwi came ahead of today's household labour force survey for the second quarter, with markets expecting the unemployment rate to remain unchanged at 6.6 per cent. The participation rate may fall to 68.4 per cent in the three month period from 68.7 per cent previously, according to a Reuters survey, as more people return to work but fail to find work.
