The kiwi dollar rose to 63.39 euro cents overnight. Photo / File
The New Zealand dollar fell from a nine-month high amid concerns politicians in Washington are making no progress in talks to avert the fiscal cliff, countering the impetus growth assets got from the Federal Reserve's further quantitative easing and weighing on stocks.
The kiwi dollar fell to 84.23 US cents
from 84.40 cents at 5pm in Wellington yesterday. The trade-weighted index fell to 75.25 from 75.33 yesterday, having earlier reached a five-year high 75.47.
Hopes around the fiscal cliff - the US$600 billion of tax increases and spending cuts due to kick in on January 1 - faded after US House Speaker John Boehner said there had been a lack of progress in talks with the White House, which was "so unserious about cutting spending that it appears willing to slow-walk our economy right up to the fiscal cliff". Sentiment was also dented after Standard & Poor's cut the outlook on the UK's crediting rating to negative.
"The euphoria over the Fed's latest round of quantitative easing was balanced by the impasse over US fiscal proposals," said Imre Speizer, a strategist at Westpac Banking Corp.
The Dow Jones Industrial Average fell 0.6 per cent in afternoon trading and the Standard & Poor's 500 Index dropped 0.8 per cent even as figures showed US unemployment claims fell more than expected to 343,000 last week, while retail sales rose and business inventories increased.
