Wednesday, August 25, 2010

NZ dollar heads down towards US 70c

The New Zealand dollar fell to its lowest level against the yen in three months and headed down toward support at US70c as international events continued to dictate direction in a week with little in the local economic diary.

The NZ dollar was at US70.15c at 5pm, down from US70.47c at 8am. It had fallen throughout yesterday from US71.25c to nearly US70c shortly after midnight then started to move upward, rising after news that sales of previously occupied homes in the United States during July fell to the lowest level in 15 years.

ANZ said market sentiment was negative through last night's session, weighing on offshore equities and initially sending currencies, the NZ dollar included, lower against the US dollar and the yen.

"The US dollar's fortunes reversed after abysmal US housing data saw a swift US dollar sell off, allowing the NZ dollar to move back to mid-range levels," ANZ said.

Westpac said that the Australian and New Zealand dollars look heavy, and should break below major support levels during the next few sessions.

In the Australian dollar's case the level is US88c. It was at US88.37c at 5pm, from US88.76c at the same time yesterday.

In the New Zealand dollar's case the support level was US70c.

The yen has been at a 15-year peak against the US dollar but retreated slightly today on speculation that Japanese authorities will intervene to knock it back down.

The NZ dollar dropped to 59.11 yen at 5pm from 59.70 yen at the same time yesterday.

It was at 0.5547 euro 5pm from 0.5559 at the same time yesterday.

The NZ dollar was at A79.37c at 5pm, down from A79.72c at 8am but up from A79.19c at 5pm yesterday.

The trade weighted index was at 65.91 at 5pm from 66.09 at the same time yesterday.

- NZPA

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