Kiwi, Aussie Dollars Have Weekly Drops as U.S., European Turmoil Saps Risk
The New Zealand and Australian dollars dropped this week as concern the U.S. economy is slowing and Europe’s sovereign-debt crisis is getting worse encouraged demand for a refuge in the greenback.
The kiwi, as New Zealand’s currency is nicknamed, had its biggest five-day slide versus the yen in more than a year after a report showed confidence among U.S. consumers dropped to a three-decade low.
The two South Pacific currencies “will be hostage to wider global developments,” said Khoon Goh, head of market economics and strategy at ANZ National Bank Ltd. in Wellington. “Investors will still be pretty tentative about things. Until we see real, concrete actions being taken, I don’t think any rally that we’ve seen so far will likely be sustained.”
New Zealand’s dollar fell 0.2 percent 83.03 U.S. cents at 11:40 p.m. in New York, from 83.19 cents yesterday. The kiwi dropped 0.3 percent to 63.72 yen, from 63.93 yen. The Aussie decreased 0.1 percent to $1.0338, from $1.0352, after touching 99.28 U.S. cents on Aug. 9, the lowest level since March 18. It slid 0.3 percent to 79.35 yen, from 79.55.
The kiwi fell 1.6 percent this week versus the dollar and plunged 3.6 percent against the yen in the largest five-day drop since July 2010. The Australian dollar has declined 1 percent against the greenback since Aug. 5 and weakened 3.1 percent versus the yen.
The Thomson Reuters/University of Michigan preliminary index of U.S. consumer sentiment slumped this month to 54.9, the lowest since May 1980. The gauge was projected to decrease to 62, according to the median forecast in a Bloomberg News survey.
To contact the reporters on this story: Kristine Aquino in Singapore at kaquino1@bloomberg.net; Joe Ragazzo in New York at jragazzo@bloomberg.net
To contact the editor responsible for this story: Robert Burgess at bburgess@bloomberg.net
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