The New Zealand dollar fell across the board today after a horror current account deficit that was even worse than forecasts.
The kiwi closed half a cent lower on US61.65 than its US62.12c close yesterday. The fall against the Australian dollar was even harder, thanks to robust housing data across the Tasman. The cross rate ended on A83.20c against A84.06c. However, there were falls against all currencies and the trade-weighted index ended on 62.03 from 62.57.
ANZ Investment Bank chief dealer Murray Hindley there was likely to be renewed pressure on the kiwi during London trading when traders read the ugly current account data.
He said if tomorrow's GDP printed worse than economists' forecasts, then the kiwi would struggle to remain above US60c.
Statistics New Zealand reported the annual current account deficit -- measuring all New Zealand's financial dealings with the world -- topped a record $14.5 billion.
That equated to 9.3 per cent of Gross Domestic Product -- the worst result since a 13 per cent deficit was recorded during the first oil shock of 1975.
The March quarter deficit came in at a seasonally-adjusted $4.1 billion. Economists on average had forecast the actual March quarter deficit would be $2.2 billion, but it was even worse -- at $2.67 billion.
Trading in the major currencies saw the yen steady against the US dollar and the euro, with market players watching to see if Bank of Japan Governor Toshihiko Fukui can weather a storm of criticism about his private investments.
Mr Fukui told a parliamentary committee that he wanted to stay on as governor and apologised again in the face of harsh criticism over his investment years ago in an equity fund run by financier Yoshiaki Murakami, now under arrest on suspicion of insider trading.
CROSS RATES
5pm today - 5pm Wednesday
NZ dlr/US dlr - US61.65 - US62.12c
NZ dlr/Aust dlr - A83.20c - A84.06c
NZ dlr/euro - 0.4865 - 0.4920
NZ dlr/yen - 70.80 - 71.22
NZ dlr/stg - 0.3367 - 0.3363
NZ TWI - 62.03 - 62.57
Australian dollar - US74.09 - US73.88
Euro/US dollar - US1.2678 - US1.2629
US dollar/yen - 114.84 - 114.73
- NZPA
<i>Currency</i>: Deficit drags kiwi down
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