NZ dollar falls to 3-week low vs. greenback on better US data
The New Zealand dollar fell to a three-week low versus the greenback on speculation stronger-than-expected US data weakens the prospects for monetary easing by the Federal Reserve.
The New Zealand dollar was little changed on 80.51 US cents at 5pm from 80.48 cents at 8am, near its lowest since July 26 and down from 80.98 cents at 5pm yesterday. The kiwi fell to 65.29 euro cents from 65.53 cents yesterday. The trade weighted index decreased to 72.56 from 72.85.
The greenback held its gains against a majority of its peers after a report showed US retail sales rose 0.8 percent in July, the first increase in four months. Its strength is likely to continue with reports due out on Wednesday forecast to show industrial production increased and regional manufacturing expanded in the world's largest economy.
"Anytime US data is mentioned there is talk of quantitative easing," said Alex Hill, senior currency strategist at HiFX. "It's nice to see the kiwi out of its recent trading range - it gives us the opportunity to test some lower levels," he said.
The kiwi is likely to trade in a range of 81.20 US cents to 79.80 cents, over the next 24 hours, Hill said.
The Fed's next policy meeting is scheduled for Sept. 12. In New Zealand there was no significant data released today. Fonterra's GlobalDairyTrade Auction takes place on Thursday morning, followed by ANZ Job Advertisements and the BNZ New Zealand Performance Manufacturing Index in the afternoon.
The New Zealand dollar dropped to 76.82 Australian cents from 77.02 cents yesterday at 5pm. The kiwi fell to 51.37 British pence from 51.59 pence and declined to 63.40 yen from 63.52 yen.