The New Zealand dollar fell after US manufacturing activity shrank, stoking concerns global growth has stalled and amid fears the European Central Bank isn't doing enough to contain the region's debt crisis.
The New Zealand dollar fell as low as 79.21 US cents overnight, the lowest since July 25, and
traded at 79.36 cents at 8am, down from 79.74 cents yesterday. The kiwi held near a two-month low at 63.16 euro cents from 63.22 cents.
US manufacturing figures showed activity shrank for a third straight month, heightening fears of a global slowdown after industrial production in China and Europe showed similar declines. That comes ahead of Thursday's ECB monetary policy review, where
President Mario Draghi will consider buying bonds with maturities of up to three years as he seeks to do "whatever it takes" to safeguard the euro.
"You would have thought the US data would have added to the signs of further quantitative easing. Instead we are waiting to hear what the ECB does and we are waiting for non-farm payrolls because that will be the lynchpin in Q3 thoughts," said Stuart Ive, currency strategist at HiFX.
"The kiwi is still weighted to the downside" with initial support around 79.20 US cents and resistance at 79.70 cents, he said.
