Wednesday 6th January 2016 |
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The New Zealand dollar fell below 80 yen as investors sought the security of the low-risk Japanese currency amid uncertainty about the global outlook.
The kiwi touched 79.38 yen, its lowest level since Nov. 19 last year, and was trading at 79.65 yen at 8am in Wellington, from 80.53 yen at 5pm yesterday. The local currency weakened to 66.93 US cents from 67.39 cents yesterday.
Investors are favouring the yen on concerns about global growth, heightened tensions in the Middle East and a slowdown in China, the world's second-largest economy. Currencies of commodity producing countries, such as the New Zealand, Australian and Canadian dollars, have been out of favour this year on fears slower global growth will dent demand for their products. Average prices fell 1.6 percent in the GlobalDairyTrade auction overnight, with the price of New Zealand's key product, whole milk powder, down 4.4 percent.
"The yen remained well supported in the more volatile and uncertain market environment," Bank of New Zealand currency strategist Jason Wong said in a note. "With the yen well supported and the New Zealand dollar seemingly out of favour this year, NZD/JPY fell below the 80 mark."
The GDT auction result was in line with BNZ's expectation for a decline of as much as 3 percent in the overall price index, Wong said.
The New Zealand dollar was little changed at 93.61 Australian cents from 93.58 cents yesterday, and at 93.64 Canadian cents from 93.70 cents.
In New Zealand today, Auckland real estate agency Barfoot & Thompson is expected to publish its latest monthly house sales data at 10am.
The kiwi edged up to 62.34 euro cents from 62.28 cents yesterday after a report showed core European inflation rose 0.9 percent in December, missing expectations for a 1 percent gain.
The local currency slipped to 45.64 British pence from 45.78 pence yesterday and fell to 4.3651 yuan from 4.3926 yuan. The trade-weighted index dropped to 73.28 from 73.55 yesterday.
BusinessDesk.co.nz
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