The New Zealand dollar headed south yesterday, losing almost half a United States cent following weak consumer confidence data from the US on Tuesday night.
By 5pm yesterday the kiwi traded at US48.50c, well down on Tuesday night's close of US48.92c, while the aussie eased to US55.51c from US55.87c on Tuesday.
One local dealer said the kiwi saw a slow southward drift with very little volume in the market.
"Support at US48.50c got tested, it dipped briefly beneath that but it did hold," he said.
"Overnight, keeping eyes on aussie and euro, particularly the euro ... it's been quite resilient so we're picking a bit of weakness, and kiwi and aussie to follow south in the next few days.
"With bad consumer numbers out of the US and a downgrade of euro-zone prospects, you wouldn't want to be long in commodity currencies at the moment, given the global growth forecast is a bit worse than people thought."
American financial markets were rattled by a dramatic fall in the Conference Board's Consumer Confidence Index to 79.4 -- a low not seen since November 1993. Excluding September 2001, it was the biggest monthly drop since 1990.
Bank of New Zealand currency strategist Stuart Ritson said yesterday that after the kiwi's pullback overnight, it could now test downside resistance around US48.10c to US48.50c in the next couple of days.
In offshore trade the greenback inched lower on fears the US economic recovery was running out of steam.
As the argument that slower US growth also pointed to malaise for other economies, traders were equally uneasy about trading currencies outside recent ranges.
More US data later in the week, including that for jobs and manufacturing, was adding to the uncertainty.
In Wellington at 5pm the US dollar traded at 123.14 yen from 123.73 yen yesterday, while the euro was at US98.29c from US98.33c.
On the crosses at 5pm the kiwi was buying A87.38c (A87.57c at Tuesday's close), 0.4936 euro (0.4976), 59.72 yen (60.51), 0.3116 pence (0.3140), and 0.7231 Swiss francs (0.7286).
The Australian dollar was at $1.1443 ($1.1422) at 5pm.
The 90-day bank bill yield was at 5.90 per cent (5.92), the New Zealand dollar trade-weighted index was at 55.63 (56.10), and the monetary conditions index was at minus 240 (minus 197).
In New Zealand the April 2004 bonds were at 5.65 per cent (5.68), the November 2006s were at 5.98 per cent (6.04), and the November 2011s were at 6.30 per cent (6.37).
- NZPA
<i>Currency:</i> NZ dollar eases back on poor US consumer numbers
AdvertisementAdvertise with NZME.