NZ dollar falls back below 83 cents as commodities slip, US GDP misses estimates
March 1 (BusinessDesk) – The New Zealand dollar slipped back below 83 US cents after US growth figures came in lower than economists were expecting, weighing on commodities. The International Monetary Fund said it may cut its US forecast if spending cuts kick in on March 1.
The kiwi dollar fell to 82.73 US cents from 83.15 cents at 5pm in Wellington yesterday. The trade-weighted index fell to 75.83 from 75.96.
Revised figures showed the US economy grew at a 0.1 percent annual pace in the fourth quarter, missing estimates of 0.5 percent growth. That weighed on prices of commodities including oil. Some US$85 billion of so-called sequester spending cuts are due to start this month, which the IMF says could dent US and global growth.
“The kiwi has run into sellers above 83 cents,” said Tim Kelleher, head of institutional FX sales at ASB Institutional. “Commodities are quite heavy today – the Aussie is lower as well.”
The kiwi may trade in a range of 82.40 US cents to 82.90 cents today, with buyers around 82.50 cents, Kelleher said.
Political stalemate in Italy, where no one party won a clear majority in elections, is also weighing on sentiment.
The kiwi traded at 63.26 euro cents from 63.23 cents and fell to 54.49 British pence from 54.81 pence. The local currency was little changed at 80.91 Australian cents and slipped to 76.61 yen from 76.76 yen.
Traders will be watching for fourth-quarter terms of trade due out today. Westpac Banking Corp is expecting “a sub-consensus flat result reflecting lower commodity prices last year.”