Dollar sinks further

Monday 20th December 2010

The New Zealand dollar reached another decade low against the Australian currency, as the kiwi continued its month-long slide against its trans-Tasman counterpart today.

Around 8am today, the NZ dollar was at A74.52c, down from A74.76c at 5pm on Friday and having dropped to around A74.30c on Saturday morning.

ANZ bank said the NZ dollar cross with the aussie continued to have the ability to go lower. A move into the A73c territory could not be ruled out, with Reserve Bank of Australia meeting minutes to be released tomorrow.

The NZ dollar also fell to seven-week lows against the Japanese and European currencies, getting down to around 0.5530 euro and 61.70 yen.

The kiwi was buying 61.84 yen at 8am today from 62.19 at 5pm on Friday, but was marginally up at 0.5591 euro from 0.5582.

The euro declined for a second straight week against the US dollar and may extend losses after a multi-level downgrade by Moody's of Ireland's credit rating affirmed the severity of the euro zone debt crisis.

The Moody's news shattered optimism spurred by a surprisingly firm German business confidence data.

"Moody's reminded us that a strengthening German economy contrasts sharply with health in Europe's (peripheral) regions. The ratings agency ... caused something of a reality check for the euro,' said Andrew Wilkinson, senior market analyst at Interactive Brokers in Greenwich, Connecticut.

The NZ dollar fell against the greenback to US73.65c at 8am today from US74.20c at 5pm Friday. The trade weighted index was down to 66.71 from 66.97.

ANZ said the coming week was big for the NZ dollar with key third quarter data being released.

The figures include balance of payments on Wednesday and gross domestic product on Thursday.

NZPA

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