Kiwi falls as investors shun risk

RICHARD MEADOWS
Last updated 08:49 22/02/2013

Relevant offers

National business

$500m revamp for Shelly Bay, Wellington Stephen Franks: Will Wellington Regional Council go down with Harbour Quay? Consumer credit: the best way to borrow money and pay off debt Elderly residents cop $14m repair bill for leaky apartment block Corrections ordered to pay record $172,000 over community work death Huge variations found in what food manufacturers say is a serving size Demand for more mobile data on the rise Manawatu-Whanganui tourism industry seeks more international travellers Fairfax NZME merger: focus on plurality Robo-retail: Amazon's checkout-free move sounds warning on jobs

The New Zealand dollar fell overnight on a wave of risk-off sentiment, and will remain on the back foot until the outcome of this weekend's Italian election, where the prospect of Silvio Berlusconi making a comeback has frayed investors' nerves.

The kiwi dollar recently traded at US83.20 cents, down from US83.41c at 5pm yesterday, while on the Trade Weighted Index of major trading partners' currencies it was unchanged at 76.20.

"There's a lot of factors why you'd be talking some risk-off at the moment," said ASB Institutional head of FX sales Tim Kelleher.

China drained a record amount of cash from its economy this week, a belt-tightening move which fed through to a strong sell-off in Asian equity markets. Wall Street also fell overnight.

Mixed messages from the US Federal Reserve about reducing its bond-buying stimulus programme lent some strength to the greenback.

Kelleher said the kiwi had broken through some strong levels of support and still looked heavy.

"Not unexpected, I would have thought, after the very strong runs in January and February."

He said the kiwi would remain on the back foot until the outcome of this weekend's election in Italy, where four-times prime minister Berlusconi may stage a comeback.

Several European politicians have warned Italian voters not to elect the divisive leader for fears that he will reignite the sovereign debt crisis.

On the crosses, the kiwi recently traded at 81.35 Australian cents, down slightly from A81.44c at 5pm yesterday, 63.14 euro cents, up from 62.87 euro cents, 54.59 pence down from 54.82p, and 77.41 yen, down from 77.95 yen.

Ad Feedback

- BusinessDay.co.nz

Special offers

Featured Promotions

Sponsored Content