The New Zealand dollar continued its week-long decline today against the US dollar, with further selling possible despite the absence of data on the immediate horizon.
By 5pm, the kiwi was buying US64.97c from US65.25c on Friday. Against the Australian dollar, it was trading at A87.22c, little changed from Friday's A87.24c close. The kiwi dropped nearly half a cent against both those currencies after weak gross domestic product data on Friday appeared to diminish the prospect of another interest rate hike.
Bank of New Zealand currency strategist Danica Hampton said the NZ dollar should remain mildly negative in a quiet week, with fresh selling expected to emerge on any recovery back towards US66c.
"So for now it is really a matter of poring over the next pieces of data which we might get from next week, to see if they might push the RBNZ towards further tightening," she said.
The kiwi was one of the worst performing currencies last week, falling 2.6 per cent against the greenback, 2.2 per cent against the euro and 1.6 per cent against the Australian dollar, on a combination of bearish comments from Finance Minister Michael Cullen and the subdued second quarter growth figures.
The NZ dollar was supported in the short-term at US64.85c, and would encounter resistance at US65.70c.
The New Zealand dollar trade-weighted index was at 65.59 from 65.72 at Friday's close.
This week's sole key data entry is the monthly ANZ Commodity Price Index on Wednesday. Next week features the NZ Institute of Economic Research quarterly business survey, and retail sales.
The US dollar hit a 5-1/2-month high against the yen on today after a surprisingly strong tankan survey of business sentiment did little to change the outlook for the Bank of Japan to raise interest rates only gradually.
The yen's failure to hold gains highlighted the market's distaste for the low-yielding currency, even as the data kept the BOJ on track to raise rates in the first quarter next year at the latest and beyond.
Rates:
5pm today 5pm Friday
NZ dlr/US dlr US64.97c US65.25c
NZ dlr/Aust dlr A87.22c A87.24c
NZ dlr/euro 0.5130 0.5135
NZ dlr/yen 76.85 76.35
NZ dlr/stg 34.74p 34.76p
NZ TWI 65.59 65.72
Australian dollar US74.48c US74.76c
Euro/US dollar 1.2665 1.2709
US dollar/yen 118.26 117.80
- NZPA
<i>Currency:</i> NZ dollar continues downward spiral
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