The New Zealand dollar continued to weaken today, including against the Australian currency.
By 5pm the NZ dollar was down to US72.65c from US73.42c at 8am and US73.94c at 5pm on Friday.
Comments by United States Federal Reserve chairman Ben Bernanke boosted the US dollar last week to the detriment
of other currencies and that continued to be the prevalent trend in Asian markets reduced by a holiday in Japan today.
The NZ dollar fell to its lowest level in more than a month against the Australian dollar at A80.50c at 5pm from A81.73c at the same time on Friday. Investors are attracted to the Australian yield story.
The NZ dollar broke above US73c last week when the Australian dollar rose on stronger than expected economic data that validated a first hike in the official interest rate. Australian commentators are already speculating about another rate rise.
Westpac said there was a fullish week of economic data locally this week, with the CPI on Thursday being the main event.
``New Zealand data this week should continue the string of improvements, and support one more push higher to the US74.50c and US75c area,' Westpac said.
The NZ dollar reached a post-float record of 46.57 British pence last week, which compares with a post-flat average of 36p. The highest it has eve been is 62.85p in 1973 before the NZ dollar floated. It was 45.89p at 5pm today.
Westpac said there was some justification in economic fundamentals for the high cross rate against sterling.
ANZ bank said the cavalry, in the form of Mr Bernanke, had come to the US dollar's rescue on Friday.
Mr Bernanke did not say anything new. He reiterated the line that accommodative policies would likely be warranted for an extended period. And he stated the obvious, that when the economy recovered, monetary policy would need to tighten, ANZ said.
Yet the markets latched on to Mr Bernanke's speech as a sign that policy could be tightened sooner than expected.
The NZ dollar was also down to 0.4941 euro at 5pm today from 0.5021 on Friday, and eased to 65.46 yen from 65.95. The trade weighted index was 65.71 at 5pm from 66.65 on Friday.
- NZPA
