NZ currency: Dollar continues to test lows

The New Zealand dollar continued to test recent lows today though investors' appetite for risky currencies such as it waxed and waned.

The NZ dollar fell to a week-low around US57.35c early, recovered and then tested support around US57.50c. It was US57.55c at 5pm from US57.80c yesterday.

News that China's annual GDP growth slowed to 6.1 per cent in the first quarter from 6.8 per cent in the final three months of last month disappointed investors who were expecting a higher figure and the yen jumped against the US dollar.

Imre Speizer, senior market strategist at Westpac, said there is support for the NZ dollar at US57.50c and below that at US57c.

"My expectation is that over the next few days we will see it below US57c," he said.

He said that in the interest rate market the two-year swap yield has fallen in recent days and moved about 12 basis points lower today to around 3.66 per cent. The rate was around 3.90 per cent last week.

New Zealand yields were still regarded as high on an international comparison and have again been attracting buyers.

"People have their eye on New Zealand still as one of the few high yielding places left and they think interest rates have to go down further," Mr Speizer said.

The NZ dollar fell against the Australian dollar to A79.20c from A80.50c yesterday.

The NZ dollar was unchanged at 0.4360 euro, and was 56.95 yen from 56.85. The trade weighted index was 57.04 at 5pm from 57.36 yesterday.

- NZPA