The New Zealand dollar lost the best part of a US cent yesterday, continuing a decline following Monday's lower than expected inflation figures and driven by risk aversion on world markets.
The kiwi touched a three-year high early Monday, topping US80c, but by 5pm yesterday was at US78.44c. That compared
with US79.10c at 8am, and US79.34c late Monday afternoon.
The kiwi also took a slide against the Australian dollar, to A74.98c, from A75.11c at 5pm on Monday.
The Reserve Bank of Australia said yesterday afternoon that it faced a challenge in balancing strong investment in the mining sector with the potential for rising inflation, pointing to solid local and global growth while it decided to keep its key rate at 4.75 per cent.
The NZ dollar was weaker against the pound, at 48.27p from 48.68p on Monday, and the yen, at 64.70 from Monday's 65.70c. Its decline was less marked against the euro, to €0.5517 from €0.5519.
The yen gained ground yesterday as declines in Asian sharemarkets prompted investors to reduce their exposure to carry trades, in which low-yielding currencies such as the yen are borrowed to buy high-yielding currencies such as the Australian and New Zealand dollars.
- NZPA
