Reserve Bank Governor Graeme Wheeler. Photo / Mark Mitchell
The New Zealand dollar fell as Reserve Bank governor Graeme Wheeler's message that the currency needs to depreciate combined with a more optimistic United States labour market view from the Federal Reserve weighed on the local currency.
The kiwi declined to US66.39c at 5pm yesterday from US66.62c at 8am and
US66.98c on Wednesday. The trade-weighted index dropped to 70.74 from 71.31.
The local currency continued its decline from Wednesday after Wheeler said the kiwi was too high given the deteriorating outlook for New Zealand's external accounts, with slumping milk prices weighing on the nation's biggest exported commodity.
At the same time, the greenback got a boost from a favourable assessment of the American labour market by the Federal Open Market Committee, though traders are still unsure whether the Fed will hike interest rates at the September meeting.
"The market came to terms with the glass half-full speech and continuing underlying message on the currency calling that further depreciation is necessary and fundamental factors will drive it," said Sam Tuck, senior FX strategist at ANZ Bank New Zealand in Auckland.
