The New Zealand dollar crept back up above the US73c level during today's local session before being driven back again on a reported threat to release foot and mouth disease.
At 5pm in Wellington the kiwi was buying US72.94c from US72.99c at 8.30am and US73.11c at 5pm yesterday. It traded
as high as US73.25c during the session before being sold off on news of a full-scale foot-and-mouth alert.
It was reported this afternoon an extortionist claiming to have a vial of disease virus had attempted to hold the Government to ransom over its taxation policy.
An outbreak of the disease would likely have huge economic consequences for New Zealand's agricultural export led economy.
However, while the claim was believed to be a hoax, the kiwi continued to soften after an initial kneejerk response to the report sent the kiwi below the US73c level.
ANZ Investment Bank head of foreign exchange John Body said the report was a catalyst for the kiwi's fall rather than its fundamental cause.
He said the kiwi had been looking expensive against both the greenback and the aussie before the report. "It's more a trigger than the market saying there's a problem."
Elsewhere, there was little in the way of offshore data tonight to provide the kiwi with near term direction. The focus for the kiwi was now Thursday's local employment data.
At 5pm in Wellington against the aussie, the kiwi was buying A94.23c (A94.54c at 5pm yesterday).
The greenback was buying 105.69 yen (105.29), the euro was buying US$1.2849 (US$1.2799), and the aussie was at US77.42c (US77.34c).
On its main crosses, the kiwi was buying 0.5677 euro (0.5712), 77.05 yen (76.99), 38.69 British pence (38.77), and 0.8782 Swiss francs (0.8839).
The trade-weighted index was at 71.38 (71.64), and the monetary conditions index was at plus 1124 (1143).
On the money markets, the 90-day bank bill yields were at 7.09 per cent (7.08), July 2009 bonds were static at 6.03 per cent, and April 2015s were at 5.91 per cent (5.90).
- NZPA
