NZ dollar weaker as euro slides

The New Zealand dollar was weaker today as the euro fell, taking other non-US dollar currencies along for the ride.

The NZ dollar was US68.85c at 5pm from US69.38c at 8am and US69.45c at 5pm yesterday. It fell as low as US68.66c on Wednesday night. It is around two-week lows against the major currencies, and its lowest level against the Australian currency in nearly 10 months.

"When we came in it was in the US69.30c area and it traded up close to US69.50c and then we went lower under US69c.

"It is just on the back of a weaker euro, and weaker sterling and stronger US dollar," a dealer said.

The euro fell to 1.3471 by 5pm from 1.3543 at 8am on worries about Greece's finances. It hit a year-low against the yen during the Asian session as the yen rose, according to Reuters. The NZ dollar was 0.5108 euro at 5pm from 0.5127 at 5pm yesterday.

A recovery in business confidence in the National Bank of New Zealand monthly business outlook survey shifted the NZ dollar slightly higher when it was announced but the dominant trend today was euro weakness and its impact on other currencies.

Against the Australian dollar the NZ dollar fell to A77.48c from A77.73c at 5pm yesterday. A noted Reserve Bank of Australia (RBA) watcher was saying yesterday it would almost certainly raise interest rates 25 basis points next week. As a result the NZ dollar has struggled against the Australian dollar.

Earlier Federal Reserve chairman Ben Bernanke had "rammed home the idea" that Federal Reserve policy tightening was still not on the cards.

The NZ dollar fell to 61.64 yen at 5pm from 62.62 yen yesterday, reflecting strength in the yen.

The trade weighted index dropped to 64.05 at 5pm from 64.50 yesterday.

- NZPA