The New Zealand dollar fell further today under "intense pressure" in the aftermath of yesterday's bomb attacks in Spain and Reserve Bank Governor Alan Bollard's threat of foreign exchange market intervention.
At 5pm in Wellington the kiwi was buying US63.40c from US65.64c at 5pm yesterday and US64.89c at 8.30am this morning,
having traded in a US63.35c to US65.05c range.
The aussie was at US72.62c from US74.26 at 5pm yesterday.
BNZ currency strategist Sue Trinh said it had been a day of consolidation for the kiwi, "but it's been an all-round unconvincing performance".
Toward the 5pm local close, the kiwi was pushing through the overnight lows "and is looking under severe pressure, sitting tentatively on important support at US63.70c", she said.
"If it goes through there then it would darken the outlook in the short term considerably. We might even see a move back towards US62.20c.
"For now you're seeing it under intense pressure but you're seeing that across the board with the euro and the aussie."
Yesterday's bomb attacks in Madrid had spooked international forex markets, Ms Trinh said.
"You're seeing an increase in global risk aversion, that never bodes well for peripheral currencies like the New Zealand dollar."
Yesterday, Dr Bollard raised possible intervention as a tool to curb volatility in the dollar, and that had also exerted downward pressure on the kiwi.
"Just the talk of intervention alone regardless of whether it comes to fruition... spooks a lot investors, especially those offshore," Ms Trinh said.
Meanwhile, the US dollar was buying 110.97 at 5pm (110.63 last night), while the euro was at US$1.2281 (US$1.2198).
On the crosses the kiwi was buying A87.46c (A88.43c), 0.5169 euro (0.5382), 70.41 yen (72.64), 35.30 British pence (36.49), and 0.8085 Swiss francs (0.8469).
The trade-weighted index was at 64.26 (66.25), while the monetary conditions index was at plus 440 (594).
Ninety-day bank bill yields were unchanged at 5.50.
The February 2006 yields were at 5.29 per cent (5.35), July 2009 bonds were at 5.50 per cent (5.56), while April 2013s were at 5.65 per cent (5.71).
- NZPA
