NZ dollar dips against US overnight

The kiwi dollar weakened against the US overnight. Photo / File
The kiwi dollar weakened against the US overnight. Photo / File

The New Zealand dollar shed almost half a US cent after better-than-expected data on both sides of the Atlantic pushed equities higher, easing speculation that global growth is dwindling.

The New Zealand dollar traded at 80.48 US cents at 8am down from 80.96 cents at 5pm. The trade weighted index decreased to 72.50 from 72.85.

Germany's DAX increased 0.9 per cent, while Standard & Poor's 500 index climbed 0.1 per cent after US retail sales rose 0.8 per cent in July, the first increase in four months. The Dollar Index, a measure of the greenback against a basket of currencies, rose 0.2 per cent to 82.52 as expectations for more asset purchases by the US Federal Reserve eased on the upbeat figures.

Equities also drew strength from the latest euro-zone gross domestic product data. Germany, Europe's largest economy, rose up 0.3 per cent in the June quarter, beating expectations. The euro-zone economy shrank 0.2 per cent in the second quarter, in line with forecasts.

"If the trend of better than expected results continues tonight with US industrial production, housing data and the Empire (manufacturing) survey you can expect the New Zealand dollar to continue to drift towards the lower end of recent ranges," said Alex Sinton, senior dealer at ANZ New Zealand. "The crux is that the US dollar is stronger and the kiwi is lower."

Australia, New Zealand's biggest export market, will release its consumer confidence and wage costs today. That follows Tuesday's business confidence figures which soared to their highest level in a year last month. The kiwi fell to 76.65 Australian cents from 77.02 cents at 5pm.

In New Zealand there is no significant data set for release today.

The New Zealand dollar fell to 65.28 euro cents from 65.54 cents and decreased to 51.30 British pence from 51.75 pence. The kiwi declined to 63.35 yen from 63.52.

- BusinessDesk

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