The New Zealand dollar fell against all of its major counterparts and dropped from a record against the U.S. currency as the global outlook discouraged demand for the South Pacific nation’s assets.
The kiwi slid as a technical indicator used by traders indicated the currency may have risen too fast and was poised to change direction. Australia’s dollar was little changed as European leaders prepared to discuss the sovereign-debt crisis tomorrow and U.S. politicians tried to break a deadlock over budget deficits before an Aug. 2 deadline.
With “these currencies, while they might benefit from periods of heightened risk appetite, there’s still going to be some resistance to pushing them much higher given those uncertainties,” said Omer Esiner, chief market analyst in Washington at Commonwealth Foreign Exchange Inc., a currency brokerage.
New Zealand’s dollar traded at 85.59 U.S. cents at 1:57 p.m. in New York, compared with 85.58 cents yesterday, when it reached a record high 85.73 cents. The kiwi fell 0.5 percent to 67.40 yen. Australia’s currency was little changed at $1.0742. The Aussie fell 0.5 percent to 84.60 yen.
The kiwi’s 14-day stochastic oscillator against the greenback climbed to 96 today, above the 80 threshold that indicates to some traders an asset’s price has risen too quickly and is poised to reverse course.