The New Zealand dollar edged lower after the OECD trimmed global growth forecasts, citing a "deeply concerning" outlook for world trade.
The kiwi slipped to 65.33 US cents at 8am in Wellington, from 65.59 cents at 5pm yesterday. The trade-weighted index weakened to 71.43 from 71.66 yesterday.
In its bi-annualeconomic outlook report released in Paris yesterday, the Organisation for Economic Cooperation and Development said a sharp slowdown in global trade and weakness in emerging market economies pose a threat to economic growth. It cut its forecast for global economic growth in 2015 to 2.9 percent from a previous estimate of 3 percent, and its forecast for 2016 to 3.3 percent from 3.6 percent. Commodity prices fell amid concerns about the outlook for global demand.
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"The OECD downgraded global growth forecasts, citing 'deep concern' over global trade, a clear warning for direction for open trade related currencies such as (the) New Zealand dollar," ANZ Bank New Zealand senior economist Mark Smith and senior FX strategist Sam Tuck said in a note. Concerns about global trade and emerging market weakness "present significant uncertainties to the near-term outlook."
The OECD's report suggests the Federal Reserve, which is expected to hike US interest rates in December, will likely slow its pace of tightening, ANZ said.
The kiwi is likely to trade between 64.60 US cents and 65.70 cents today, ANZ said. In New Zealand today, October data is scheduled for release on electronic card spending, while the Real Estate Institute is due to release its monthly report on house prices.
The local currency weakened to 92.67 Australian cents from 92.94 cents yesterday ahead of a report on Australian business confidence today.
The New Zealand dollar slipped to 60.71 euro cents from 60.92 cents yesterday, fell to 43.21 British pence from 43.52 pence, dropped to 80.38 yen from 80.89 yen, and declined to 4.1562 yuan from 4.1706 yuan.
