NZ dollar sinks after weak US, Euro data

The New Zealand dollar tumbled to 63.52 euro cents and 51.08 British pence overnight. Photo / file
The New Zealand dollar tumbled to 63.52 euro cents and 51.08 British pence overnight. Photo / file

The New Zealand dollar fell as weaker economic figures in US and Europe weighed on equity markets and eroded investors' appetite for riskier, or higher yielding assets.

The kiwi dollar sank to 81.03 US cents from 81.67 cents at 5pm in Wellington yesterday. The trade-weighted index fell to 72.68 from 73.11.

The kiwi dollar added to its decline yesterday following weak retail sales after the euro zone's industrial production sank the most in more than three years in September and Greece's economy suffered a contraction for the 17th consecutive quarter. Meantime, in the US, Commerce Department data showed that retail sales slid more than expected in October.

"Overnight, the NZD/USD resumed its decline as global risk sentiment stuttered," said Mike Jones, currency strategist at Bank of New Zealand.

"The recent deterioration in the NZ economic backdrop means the NZD/USD is more exposed than usual to any cooling of global optimism."

Weak retail sales and last week's data showing third-quarter unemployment rose to 7.3 per cent has economics pondering whether the economy grew at all in the latest three months. The Performance of Manufacturing Index is due out today and there are expectations manufacturing remains in contraction.

The kiwi slipped to 78.04 Australian cents from 78.13 cents and traded at 64.91 yen from about 64.90 yen yesterday. The New Zealand dollar tumbled to 63.52 euro cents from 64.22 cents and fell to 51.08 British pence from 51.41 pence.

- BusinessDesk

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