NZ dollar weakens

November 25 - Open

The New Zealand dollar weakened overnight, as economic growth and consumer confidence data suggested a United States recovery could be slower and less robust than previously thought.

The reports rekindled the safe-haven allure of both the greenback and yen, reducing investor appetite for riskier assets like stocks and commodities, including higher-yielding currencies such as the NZ and Australian dollars.

By 8am the NZ dollar was buying US72.39c, down from US72.80c at 5pm yesterday. The kiwi was also down to 64.10 yen from 64.70.

The NZ dollar reached its lowest level against the euro for about three weeks, dropping from 0.4871 euro at the local close to a low point around 0.4830, and by the local open was at 0.4838.

Against the Australian dollar the kiwi was at A78.87c at 8am from A79.07c at 5pm, while the trade weighted index fell to 64.55 from 64.92.

BNZ Capital strategist Mike Jones said the NZ dollar had traded choppily over the past week or so as investors weighed up the likely shape of the global economy in 2010.

Choppy trading continued overnight as markets assessed the impact of a slew of economic data, with a more circumspect outlook for the global economy taking a toll on the NZ dollar.

A lacklustre night for commodity prices also weighed.

NZPA