NZ dollar falls below 80 US cents

The New Zealand dollar fell to 79.82 US cents. Photo / File
The New Zealand dollar fell to 79.82 US cents. Photo / File

The New Zealand dollar fell as hopes fade the Federal Reserve will reveal fresh details of monetary stimulus and Spain delays asking for a bailout ahead of the central bank summit at Jackson Hole, Wyoming.

The New Zealand dollar fell to 79.82 US cents, the lowest since July 25, from 80.13 cents yesterday. The kiwi decreased to 63.78 euro cents, the lowest since July 3, from 63.93 cents and the trade weighted index declined to 71.88 from 72.05.

Equity markets on both sides of the Atlantic fell as hopes for an immediate monetary boost from the Fed diminish ahead of this weekend's central bankers' retreat in Jackson Hole.

Spain's Prime Minister Mariano Rajoy said his government would delay deciding whether to seek a sovereign bailout until the aid conditions are clear.

Wall Street's Dow Jones Industrial index slipped 0.8 per cent and the Standard and Poor's 500 index shed 0.5 per cent.

Germany's DAX 30 index dropped 1.6 per cent.

"The markets are long on Aussie and kiwi - there is some profit taking ahead of Jackson Hole," said Tim Kelleher, head of institutional FX sales NZ ASB Institutional, referring to the position where traders bet an asset will appreciate.

"The US data is not that bad - I would have thought Bernanke would sit on his hands - the US economy seems to be slowly coming into life."

The latest US reports showed consumer spending increased 0.4 per cent in July, while incomes climbed 0.3 per cent for a third month, according to government figures.

Investors will be looking to the release of China's manufacturing figures on Saturday after falling iron ore prices and a slowing of the world's second largest economy sparks fears it may be coming to the end of Australia's resources boom.

There is no significant New Zealand data set for release today.

The New Zealand dollar edged down to 77.49 Australian cents at 8am from 77.58 cents yesterday at 5pm, and decreased to 62.73 yen from 63 yen. The kiwi slipped to 50.51 British pence from 50.64 pence yesterday.

- BusinessDesk

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