Kiwi falls amid caution over China

  • 24/08/2015
Kiwi falls amid caution over China

The New Zealand dollar has dropped back below 66 US cents as stocks across Asia followed Wall Street and Europe lower after weaker-than-expected Chinese manufacturing data last week reignited concern the world's second-biggest economy is slowing.

The kiwi fell to 65.88 US cents at 5pm in Wellington from 66.53 cents at 8am and 66.82 cents on Friday in New York.

The trade-weighted index declined to 71.07 from 71.25.

"We've been sold off with the risk-off tone of equity markets," said Tim Kelleher, head of institutional sales at ASB Institutional in Auckland.

"Given equity markets still look like they're going to be heavy for the next two to three days, then kiwi should head back towards support around 65.50 [US cents]."

Mr Kelleher said institutional investors were selling US dollars to cash in gains on the currency and offset some of their recent losses in equities, which had slowed the kiwi's decline.

Investors will look to see whether Chinese policymakers attempt to intervene in the stock market slump after media reported officials had approved efforts to prop up equities.

The kiwi dropped to 4.2145 Chinese yuan at 5pm in Wellington from 4.2689 yuan on Friday in New York.

The kiwi was little changed at 91.21 Australian cents from 91.23 cents last week, and dropped to 79.82 yen from 81.53 yen and to 57.50 euro cents from 58.66 cents.

NZN