NZ dollar falls back toward 72 US cents with little to set direction as Yellen, Draghi awaited

The kiwi slipped to 72.08 US cents as at 8am in Wellington. Photo / 123RF

The New Zealand dollar fell back toward 72 US cents in the absence of much market-moving news and as traders await speeches from the European Central Bank chief Mario Draghi and Federal Reserve chair Janet Yellen.

The kiwi slipped to 72.08 US cents as at 8am in Wellington, and earlier touched 71.92 cents, from 72.23 cents late yesterday. The trade-weighted index fell to 75.85 from 76.04 yesterday.

Financial markets are looking to the central bankers' symposium in Jackson Hole, Wyoming, to provide some direction.

Yellen's speech may bring more hints at when the Fed will begin to reduce its balance sheet and Draghi may comment on the strength of the euro, which has reached a 2 1/2-year high against the greenback. In New Zealand, sentiment was dented this week by weaker forecasts for economic growth and budget surpluses and with a close race looming in the election just four weeks away.

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"There is a combination of factors for NZD weakness," traders at HiFX said in a note.

"Weaker economic forecasts combined with the pre-election fiscal update on Wednesday this week, some position unwinding, and election uncertainty."

The local currency fell to 91.21 Australian cents from 91.41 cents yesterday. It dropped to 61.04 euro cents from 61.19 cents and fell to 56.29 British pence from 56.48 pence. The kiwi dropped to 4.8005 yuan from 4.8124 yuan and declined to 78.93 yen from 78.82 yen.