The New Zealand dollar declined as commodity-linked currencies fell out of favour on concerns about global growth after oil prices dropped.
The kiwi slipped to 67.31 US cents at 8am in Wellington, from 67.48 cents at 5pm yesterday. The trade-weighted index was little changed at 72.34 from 72.33 yesterday.
The US dollar index, which measures the greenback against a basket of currencies, advanced as investors favoured less risky assets following a drop in oil prices after US crude inventories increased by the most in six months. Other commodities such as gold, base metals and iron ore also declined, weighing on the currencies of commodity-linked currencies such as the kiwi.
"Commodity currencies remained under pressure after a rise in in US crude inventories dragged oil prices lower," ANZ Bank New Zealand senior economist Sharon Zollner and senior FX strategist Sam Tuck said in a note. "We expect the US dollar to continue to recover and for downward pressure on commodity currencies to continue."
ANZ expects the kiwi to trade between 66.80 US cents and 67.60 cents today.
