The NZ dollar was hit by a number of international issues. Photo/123RF.
The New Zealand dollar fell against a stronger greenback as higher US interest rates and an upcoming debate on Italy's fiscal health buoyed the world's reserve currency.
The kiwi declined to 66.14 US cents from 66.54 cents yesterday. It traded at 56.74 euro cents from 56.62 cents yesterday.
The US
dollar index advanced 0.8 per cent as the Fed's track for higher rates continued to make the greenback an increasingly attractive investment, as other central banks including New Zealand are seen keeping monetary policy unchanged. Meanwhile, the euro fell 0.7 per cent ahead of Italy's budget debate where it's feared politicians may not be able to meet European Union debt rules. The yield on 10-year Italian government bonds rose 8 basis points to 2.92 per cent.
"A last-minute dispute between Italy's two deputy PMs and the finance minister over a demand for extra spending and thus the size of the fiscal deficit, got the market's attention and saw a weaker euro and higher Italian bond yields," Bank of New Zealand senior markets strategist Jason Wong said in a note. "The USD is stronger across the board which sees the NZD down to its lowest level this week."
Yesterday's Reserve Bank review did little to move the currency, with the official cash rate kept at 1.75 per cent and governor Adrian Orr leaving the door open for a cut.
