NZ dollar slips below 67 US cents to seven-week low

The New Zealand dollar fellow below 67 US cents. Photo / 123RF

The New Zealand dollar fellow below 67 US cents for the first time in more than seven weeks as weaker than expected US consumer confidence raised new fears about the pace of growth in the world's biggest economy.

The kiwi traded at 66.99 US cents as at 8.30am in Wellington from 67.19 cents yesterday. The trade-weighted index declined to 73.31 from 73.57 yesterday.

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Stocks on Wall Street gave up some of yesterday's gains, with the Standard & Poor's 500 index down 2.4 per cent in late trading after data showed US consumer confidence fell to a five-month low. Stronger than expected retail spending data yesterday underpinned the biggest ever points gain on the Dow Jones Industrial Average, although financial markets remain highly volatile with the Volatility Index at 33.54, well above its moving average of 26.12.

"Currencies have been relatively stable, given the waves reverberating around other markets," HiFX traders said in a note. "In light of these moves, it is not hard to imagine traders coming back to their desks and hitting the sell button."

No local data is scheduled for today, with traders continuing to take their cues from overseas news.

An area of major uncertainty for investors is the ongoing trade dispute between the US and China. Mid-level officials are set to meet in January to resolve their dispute.

However, Reuters reported US President Donald Trump is considering issuing an executive order next year to ban US firms from using telecommunications equipment made by Chinese tech companies Huawei Technologies and ZTE.

The kiwi dropped to 4.6002 Chinese yuan from 4.6296 yuan yesterday and rose to 95.35 Australian cents form 95.16 cents. It fell to 74.06 yen from 74.52 yen yesterday and dropped to 58.50 euro cents from 59.02 cents. The local currency traded at 52.96 British pence from 53.07 pence yesterday.