The New Zealand dollar extended its decline, briefly reaching an 11-month low overnight, as commodity prices continued to weaken, weighing on currencies tied to prices of raw materials including the Australian dollar.
The kiwi traded at 68.73 US cents as at 8am in Wellington, and earlier dropped to 68.36 cents, the lowest since June last year, from 68.82 cents late yesterday. The trade-weighted index declined to 74.80 from 74.95.
The CRB Index of 19 commonly traded commodities fell 1.9 per cent overnight to the lowest since early August, amid signs of weaker demand in China, while crude oil sank almost 5 percent.
The Australian dollar fell to its lowest level since Jan. 11. However, the decline in commodity currencies wasn't matched by a stronger US dollar, which fell about 0.5 percent, based on the US dollar index, to the lowest level in more than a week, in the face of a stronger euro and after figures showed non-farm productivity in the US fell a greater-than-expected 0.6 percent on an annual basis, while the US trade deficit narrowed to US$43.7 billion in March.
AdvertisementAdvertise with NZME.
"This week's theme has been weakness in commodity prices, driving down the commodity currencies, and that has continued overnight," said David Croy, senior rates strategist at ANZ Bank New Zealand, in a note.
He said it was "time for a bounce" in the kiwi, though, because the weakness in commodities has been in materials Australia exports such as iron ore, while New Zealand's commodity prices have held up.
Traders are now looking ahead to the Reserve Bank's survey of expectations today, which will show whether there has been a pickup in where inflation is thought to be heading.
See live rates for the NZ-US $ below. Click for more information:
Then tonight in the US, labour market figures are expected to show the US economy added 190,000 jobs last month, a rebound from a surprisingly weak 98,000 added in March.
Across the Tasman today, the Reserve Bank of Australia releases its full monetary policy statement today, having kept its cash rate unchanged this week.
The kiwi traded at 92.66 Australian cents from 92.75 cents late yesterday. It fell to 4.7361 yuan from 4.7403 yuan and declined to 77.16 yen from 77.60 yen. It slipped to 62.54 euro cents, also an 11-month low, from 63.11 cents and dropped to 53.13 British pence from 53.39 pence.