NZ dollar slides

new-zealand-dollarThe New Zealand dollar has fallen to a 17-month low against the euro after German trade data added to signs of stronger growth.

The kiwi fell to 59.86 euro cents as at 0800 in Wellington, and earlier touched the lowest since May last year at 59.82 euro cents.

That’s from 60.05 euro cents late on Tuesday.

The kiwi traded at US70.69c from US70.68c.

Export growth lifted Germany’s trade surplus in August to a seasonally adjusted 21.6 billion euros, beating the forecast of 20 billion euros in a Reuters survey.

In New Zealand, political hiatus remains, with the likely outcome of coalition talks now delayed.

“NZ’s political uncertainty which continues to weigh on the currency looks to continue beyond Thursday after Winston Peters last night announced that his self-imposed deadline was to be extended,” HiFX traders said.

Traders will be watching for the release on Wednesday of the Federal Open Market Committee’s minutes of its September 21 meeting for clues to the pace of interest rate hikes in the US.

The trade-weighted index fell to 74.50 from 74.64 late on Tuesday.

Bank of New Zealand economist Doug Steel said the TWI was now more than 4 per cent below the Reserve Bank’s projection in August and a weaker currency is likely to stoke imported inflation.

“This adds to some other signs that inflation is coming in higher than the RBNZ anticipated,” he said.

The kiwi traded at A90.81c from A90.84c late on Tuesday.

It fell to 4.6452 yuan from 4.6633 yuan and declined to 79.42 yen from 79.64 yen.

The kiwi fell to 53.53 British pence from 53.72 pence after figures showed British construction output unexpectedly rose in August while industrial production gained as expected.


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