Three-month low for NZD
By Tina Morrison
The New Zealand dollar fell to its lowest in more than three months overnight, then rebounded as investors deemed the country's growth outlook isn't as bad as its peers.
The kiwi touched 63.46 US cents overnight and was trading at 64.19 cents at 8am in Wellington, from 63.77 cents at 5pm yesterday. The trade-weighted index advanced to 71.08 from 70.65.
Risk aversion dominated the market on concerns about plunging oil prices and the outlook for global growth.
US crude oil plunged to a low of US$26.30 a barrel, its weakest since May 2003, after the International Energy Agency warned the market could "drown in oversupply".
An unexpected drop in the US consumer price index in December stoked speculation the Federal Reserve may hesitate to raise interest rates further.
Even though the kiwi was dented by weak consumers price index data, it rebounded on Thursday morning as investors favoured its prospects over other currencies.
"As bad as the sentiment and doom and gloom feeling following the CPI data and falling commodity prices, New Zealand in comparison to the rest of the world is looking a lot less bad," said Bancorp Treasury Services' Peter Cavanaugh.
"New Zealand may have taken one step back yesterday, the rest of the world took two."
Global growth concerns have dented the currencies of countries exporting so-called 'hard' commodities such as oil and iron ore more than countries like New Zealand, which exported 'soft' commodities such as food, he said.
The New Zealand dollar advanced to 93.08 Australian cents from 92.91 cents ahead of reports on inflation expectations and new home sales and it gained to 58.85 euro cents from 58.25 cents ahead of the European Central Bank meeting.
The local currency rose to 45.33 British pence from 45.07 pence, advanced to 74.87 yen from 74.60 yen, and increased to 4.2225 yuan from 4.1943 yuan.