The New Zealand dollar fell to a five-month low against the Australian currency yesterday evening, before managing a small recovery.
After initially tumbling around half a cent on disappointing gross domestic product figures yesterday morning, the kiwi eventually bottomed under A76.40c before clawing back to A76.87c at 8am, ahead of
its level of A76.59c at 5pm yesterday.
Against the US currency, the NZ dollar appeared to be attempting something of a recovery during the early hours of the morning, getting to around US73.35c, then falling away again to be buying US73.01c at 8am, below the US73.23c at 5pm.
ANZ bank said there had been a classic corrective move in the NZ dollar as investors with short term positions were squeezed out overnight.
Real demand entered the market below US72.80c and delivered the move back above the US73c level, ANZ said.
It expected the NZ dollar cross with the aussie to continue to test support levels after yesterday's "dismal" data which showed GDP rising 0.2 per cent in the second quarter, less than the 0.8 per cent the market was expecting.
Anyone looking to sell the NZ dollar would have lowered their expectations, so moves above A77c should be limited through to the end of the week.
The NZ dollar edged up to 0.5482 euro at 8am from 0.5466 at 5pm, but dropped to 61.57 yen from 61.94. The trade weighted index fell to 66.50 at 8am from 66.58 at 5pm.
The euro retreated from a five-month high against the US dollar, hobbled by worries about Ireland's economy and banks, while the greenback fell to its lowest against the yen since the Bank of Japan intervened on September 15 to weaken the currency.
- NZPA
