KEY POINTS:
The New Zealand dollar continued to slide today, ending the session almost one cent down against both the US and Australian dollars on yesterday.
It closed on US69.30c from US70.27c at 5pm yesterday, while against the aussie it ended on A84.23c from A85.20c.
It lost ground on all the major crosses and the trade weighted index dropped 1.5 per cent to 66.78.
Having initially found some support yesterday from a surging Australian dollar after the growth data release, the NZ dollar encountered general selling pressure, ANZ bank said today.
That was despite a rally in US equity markets, which in recent weeks had been a good guide to the NZ dollar's direction.
The kiwi weakness was across the board, being particularly soft against the Australian dollar with the strong Australian GDP data illustrating the different stages the two economies were in in their respective business cycles, ANZ said.
"We feel this theme will intensify over the next few months as the NZ economy continues to slow, while the Australian economy remains solid."
Sentiment was not helped by a survey showing manufacturers reported a sharp further loss of confidence.
The Canterbury Manufacturers Association's monthly survey showed net confidence among Canterbury firms dropped to minus-60 from minus-17 in June, previously the lowest level since January 1996.
The Reserve Bank of Australia left interest rates unchanged at 6.50 per cent, as widely expected and economists expect rates to remain on hold this year despite yesterday's strong growth figures.
In addition to the RBA, the Bank of Canada is seen leaving interest rate settings steady this session, while the Bank of England starts a two-day rate-setting meeting on Wednesday at which it is widely expected to keep rates at 5.75 per cent.
The European Central Bank's policy meeting on Thursday may attract the most attention this week. Many economists believe the ECB will keep rates unchanged at 4.0 per cent this time due to the recent turmoil in credit markets.
Before the market turbulence, the ECB had been widely expected to lift rates 25 basis points to 4.25 per cent.
Reuters currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US69.30c US70.27c
NZ dlr/Aust dlr A84.23c A85.20c
NZ dlr/euro 0.5082 0.5161
NZ dlr/yen 80.17 81.42
NZ dlr/stg 34.42p 34.80p
NZ TWI 66.78 67.69
Australian dollar US82.28c US82.43c
Euro/US dollar 1.3604 1.3612
US dollar/yen 115.83 115.88
- NZPA