NZ dollar falls against US overnight

The kiwi dollar dropped versus the US but gained against the yen overnight. Photo / File
The kiwi dollar dropped versus the US but gained against the yen overnight. Photo / File

The New Zealand dollar fell against the greenback as a weaker earnings outlook for US companies including Caterpillar and Freeport-McMoRan Copper & Gold weighed on Wall Street. The kiwi gained against the yen on talk of Bank of Japan easing.

The kiwi dollar fell to 81.59 US cents from 81.73 cents in Asia yesterday. The trade-weighted index was little changed at 72.81 from 72.83.

Caterpillar, the earthmoving equipment maker, said worldwide growth was easing more than anticipated, while Freeport-McMoRan Copper & Gold posted an unexpected sharp drop in profit. The Dow Jones Industrial Average slipped 0.4 per cent as doubts about global growth resurfaced.

The yen tumbled against the kiwi and most of its trading peers on expectations that the Bank of Japan will ease monetary policy at a meeting next week. Ahead of that, new Reserve Bank of New Zealand governor Graeme Wheeler makes his first review of monetary policy on Thursday.

"Domestically, all eyes this week are on new RBNZ Governor Wheeler's first OCR review," said Mike Jones, strategist at Bank of New Zealand. Economists expect no change in the official cash rate.

The kiwi dollar rose to 65.17 yen from 64.84 yen late yesterday. The Bank of Japan is leaning toward easing again, according to sources familiar with its thinking, with policymakers discussing additional steps that could come together with a further increase in its asset buying scheme. The BOJ has been under renewed pressure to expand monetary stimulus at its Oct. 30 rate review when it is expected to cut its growth forecasts and push back the timing of hitting its 1 per cent inflation target.

The kiwi dollar weakened to 79.16 Australian cents from 79.24 cents and slipped to 50.98 British pence from 51.02 pence. The currency fell to 62.51 euro cents from 62.68 cents.

- BusinessDesk

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