Kiwi dollar drops on global growth fears

  • 22/10/2015
Kiwi dollar drops on global growth fears

By Tina Morrison

The New Zealand dollar declined as commodity-linked currencies fell out of favour on concerns about global growth after oil prices dropped.

The kiwi slipped to 67.31 US cents at 8am in Wellington, from 67.48 cents at 5pm on Wednesday while the trade-weighted index was little changed at 72.34 from 72.33.

The US dollar index, which measures the greenback against a basket of currencies, advanced as investors favoured less risky assets following a drop in oil prices after US crude inventories increased by the most in six months.

Other commodities such as gold, base metals and iron ore also declined, weighing on the currencies of commodity-linked currencies such as the kiwi.

"Commodity currencies remained under pressure after a rise in in US crude inventories dragged oil prices lower," ANZ said.

"We expect the US dollar to continue to recover and for downward pressure on commodity currencies to continue."

Finance Minister Bill English is scheduled to present a keynote address at the Citi Australian and New Zealand Investment Conference in Australia.

The New Zealand dollar advanced to 93.14 Australian cents from 92.81 cents ahead of the release of Australian third-quarter business confidence.

The local currency was little changed at 59.35 euro cents from 59.38 cents ahead of the European Central Bank's policy decision where no change is expected, but ECB president Mario Draghi may hint at further easing.

The kiwi was broadly unchanged at 43.63 British pence from 43.68 pence ahead of UK September retail sales data.

The New Zealand dollar weakened to 80.73 yen from 80.89 yen after a report showed Japanese exports grew at the slowest pace since mid-2014 and it slipped to 4.2733 yuan from 4.2788 yuan.

NZN