The kiwi closed on its highs today, despite figures showing New Zealand's debt with the outside world ballooned to an all time high in the June year.
The $11.89 billion annual current account deficit was the worst ever in dollar terms, Statistics New Zealand said. It equates to overspending by $30,000 for every New Zealander.
Economists estimate the deficit amounts to 8 percent of GDP -- the second worst behind a 9.0 percent deficit during the first oil shock in 1975.
Despite that data, the New Zealand dollar closed at US69.83c -- a touch higher than its local open of US69.79c, but softer than yesterday's local close of US70.21c.
It briefly fell to a three-week low around US69.50c just after the data, before recovering. Bank bills and bonds were unmoved.
Analysts said longer term the widening deficit would weigh on the local unit, which hit a 23-year high of US74.67c in March.
The kiwi was also under pressure from a firmer US dollar, which rallied after the US Federal Reserve raised its key interest rate for the 11th straight time, to 3.75 percent.
The Fed signalled that more rate hikes were likely even as the United States recovers from the effects of Hurricane Katrina.
The following are Reuters currency rates:
5pm 5pm (Tuesday)
NZ dlr US69.83c US70.21c
NZ dlr/Aust dlr A90.74c A91.30c
NZ dlr/euro 0.5732 0.5771
NZ dlr/yen 78.06 77.18
NZ dlr/stg 38.71p 38.90p
NZ TWI 70.27 70.63
Australian dollar US76.97c US76.91c
Euro/US dollar US1.2186 US1.2166
US dollar/yen 111.78 111.34
- NZPA
<EM>Currency:</EM> Kiwi closes on highs despite record trade deficit
AdvertisementAdvertise with NZME.