The kiwi fulfilled predictions it was headed towards the downside yesterday as investors began to anticipate the international slowdown catching up on New Zealand shores.
"I think the market is starting to think that some of the data going forward in New Zealand is going to be a little bit softer, we're not going to be immune to what we're seeing offshore in terms of the economy," Sean Brown of Deutsche Bank said.
One of the first pieces of data expected to shed light on this was the National Bank business outlook survey, due out on Wednesday .
Yesterday the kiwi slid from a opening of US41.30c this morning sinking at one stage to US40.96c before closing at US41. 11c. It closed on Friday at US41.31c and trod water around that level all weekend.
The Australian dollar was also trading softer, from US50.39c on Friday to close today around US50.12c, as the greenback continued to flex its muscles.
US equity markets were back to pre-September 11 levels, indicating investors were starting to look to the longterm, Mr Brown said.
Dealers predicted today that a break at US41c would likely see the kiwi sliding south of US40.90c. Trading was quiet although there had been some reasonable offshore selling.
Overnight dealers expected the kiwi to travel between US40.70c and US41.20c.
On the crosses at 5pm the kiwi was trading at A82.00c (A81.98c at Friday's close), 0.4600 euros (0.4622), 50.37 yen (50.73), 28.58 pence (28.94), 0.8998 marks (0.9040), and 0.6786 Swiss francs (0.6821).
The Australian dollar weakened slightly to end at $NZ1.2195, from Friday's $NZ1.2200 close.
The 90-day bill yields were at 4.99 per cent (5.06), the trade-weighted index slipped to 49.22 (49.46) as was the monetary conditions index at minus 942 (-912).
Among the bonds, the March 2002s were flat at 4.88 per cent, the April 2004s at 5.11 per cent (5.12), the November 2006s were at 5.69 per cent (5.71) and the November 2011s were at 6.28 per cent (6.32).
- NZPA
<i>Currency:</i> Kiwi trends downward as Greenback flexes muscle
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