Kiwi slips under US80c

Wednesday 4th May 2011

The New Zealand dollar slipped under the US80c level for the first time since Friday, as investors paring back risky trades amid fears of a geopolitical backlash following the death of al Qaeda leader Osama bin Laden.

About 6am the kiwi slipped under US80c, dropping to around US79.70c before pushing back up to be just under the US80c level at 8am, down from US80.47c at 5pm yesterday.

The kiwi also dropped from 0.5432 euro at 5pm to a five-week low 0.5375 early today, then edged back up to 0.5390 euro at 8am.

After rising against the US dollar, the euro fell back to be little changed as investors digested news that Portugal had reached agreement with the European Union and International Monetary Fund on a bailout loan.

Commodities had their biggest one-day loss in two weeks, pulling stocks on Wall Street down as well, after fear that huge price gains last month had made everything from oil to silver too costly.

The US dollar's rebound after a 10-day slide was a catalyst to the selloff. The greenback was volatile, rising as US markets opened, then falling at midday before surging again toward the close.

Oil prices slid up to 3%, ending sharply off the previous day's 31-month highs.

The NZ dollar slipped to A73.62c at 8am against the Australian dollar from A73.75c at 5pm, and was down to 64.72 yen from 65.18. The trade weighted index fell to 68.06 at 8am from 68.42 at 5pm.

NZPA

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