Kiwi falls on global risk shift
A long-expected ratings downgrade for the ailing UK economy has taken its toll on the kiwi dollar, which fell against the greenback as investors reined in risk appetites.
The kiwi recently traded at US83.53 cents, down from US83.75c at 5pm on Friday, while on the Trade Weighted Index of major trading partners' currencies it was unchanged at 76.20.
Ratings agency Moody's slashed the UK's credit rating down a notch from the prized triple-A late on Friday.
"That has taken a toll on the kiwi dollar as investors pull back on risk appetite a little, and the USD receives support from quite heavy selling of the British pound," said BNZ currency strategist Mike Jones.
Jones said markets expected a downgrade but the axe had fallen a little earlier than anticipated.
"It's basically a reflection of the parlous state of the UK economy," he said.
"High debt, no growth, high inflation - a fairly toxic mix."
Part of the local fallout was offset by the kiwi reaching a new post-float high against the pound, recently trading at 55.26 pence.
The next major steer will be the release of HSBC's Flash PMI data for China later this afternoon.
On the crosses, the kiwi recently traded at 81.03 Australian cents, down from A81.18c at 5pm on Friday, 63.19 euro cents, up slightly from 63.14 euro cents, 55.26 pence, up from 54.86p, and 78.75 yen, up from 78.06 yen.
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