N.Z. Dollar Drops to 13-Month Low Versus Yen Amid Concern Growth Slowing
Aug. 23 (Bloomberg) -- Kit Juckes, head of foreign-exchange research at Societe Generale SA, talks about global bond markets and the outlook for the Australian dollar following the weekend's electoral deadlock. He speaks with Mark Barton on Bloomberg Television's "Start Up." (Source: Bloomberg)
The New Zealand dollar tumbled to the lowest in 13 months against the yen and the Australian currency fell to an almost seven-week low as concern the global economy is faltering damped appetite for growth-linked assets.
New Zealand’s currency, nicknamed the kiwi, accelerated its drop after data showed U.S. sales of existing homes dropped more than forecast in July. It fell earlier as a survey showed company executives lowered their expectations for the nation’s inflation rate. Australia’s dollar declined as crude oil slid for a fifth day.
“Sellers are starting to dominate, consistent with recent concerns about a double-dip recession for the U.S. and perhaps the global economy,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “Commodity prices as well have come off the boil, providing another drag for the likes of the kiwi and Aussie.”
New Zealand’s dollar tumbled 1.3 percent to 59.40 yen at 12:29 p.m. in New York, from 60.18 yen yesterday. It touched 58.66 yen, the lowest level since July 13, 2009. The kiwi slipped 0.1 percent to 70.61 U.S. cents.
Australia’s currency dropped 1.9 percent to 74.48 yen, from 75.90 yen, and reached 73.58 yen, the least since July 7. The Aussie slid 0.7 percent to 88.51 U.S. cents, from 89.13 cents. It touched 87.97 cents, the lowest level since July 22.
U.S. Housing Data
Purchases of U.S. existing homes plunged 27.2 percent to a 3.83 million annual rate, figures from the National Association of Realtors showed today in Washington. The pace compares with the median forecast of a 4.65 million rate in a Bloomberg News survey.
Crude oil for October delivery dropped as much as 2.3 percent to $71.45 a barrel in New York, the lowest since July 7.
The Australian dollar slumped yesterday after the nation’s federal election failed to deliver a majority government for the first time in 70 years.
Inflation in New Zealand will average 2.56 percent in two year’s time, according to a quarterly survey published on the Wellington-based Reserve Bank of New Zealand’s Web site. The forecast was 2.8 percent in a previous survey in May.
The central bank aims to keep annual inflation between 1 percent and 3 percent on average.
To contact the reporters on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net; Catarina Saraiva in New York at asaraiva5@bloomberg.net
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