Currency: NZ dollar slumps with equity markets

The New Zealand dollar was lower today after a tumble in the United States share market reduced investors' appetite for risk.

By 5pm the kiwi was at US57.30c as it continued retreating from the three-month high around US59.75c on Monday afternoon.

The NZ dollar was looking well bid this week until yesterday's "seriously bad" Quarterly Survey of Business Opinion and a decline in global equity markets turned sentiment negative.

Murray Hindley, chief foreign exchange dealer at ANZ Institutional Bank, said the weaker equity markets were weighing on sentiment and Japan's Nikkei Index was down today.

He expected the NZ dollar to find support around US56.70c and to continue to have trouble getting through the US57.65c area.

Little domestic news is in the diary ahead of the Easter weekend, leaving the market focused on offshore events.

The debate is on again about how low New Zealand interest rates will go after the Reserve Bank of Australia cut Australian interest rates 25 basis points to 3 per cent yesterday.

BNZ Capital currency strategist Danica Hampton said the contrasting outlooks for interest rate policy in this country and Australia encouraged selling of the NZ dollar against the aussie.

The NZ dollar fell from a near three-month high against the aussie of about A83.10c on Monday night to A80.95c at today's local close.

The kiwi was also down to 57.35 yen at 5pm from 58.65 yesterday, and down to 0.4347 euro from 0.4355. The trade weighted index slid to 57.27 from 57.97.

- NZPA