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N.Z. Dollar Plunges to 5-Week Low as Wheeler Flags Intervention

N.Z. Dollar Plunges to 5-Week Low as Wheeler Flags Intervention
New Zealand’s currency has appreciated 6.6 percent in the past 12 months against the greenback. Photographer: Brendon O'Hagan/Bloomberg

May 8 (Bloomberg) -- The New Zealand dollar slid to a five-week low after the nation’s central bank said it had sold the local currency and was capable of further intervention.

Currency sales were in the past month and designed to top off the so-called kiwi, Reserve Bank of New Zealand Governor Graeme Wheeler said today. Australia’s dollar touched its weakest level in two months before jobs data tomorrow projected to show Australia’s unemployment rate remained at its highest in more than three years. The Reserve Bank of Australia cut its benchmark interest rate to a record low yesterday.

“The kiwi has been the flavor of the month and Governor Wheeler would like the market to choose a new flavor,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “There have been a lot of people that have been caught very long kiwi.” A long position is a bet a currency will rise in value.

New Zealand’s currency dropped 0.9 percent to 83.80 U.S. cents as of 11:41 a.m. in Sydney after reaching 83.60, the weakest since April 1. The kiwi weakened 0.9 percent to 82.97 yen. The Australian dollar slid 0.1 percent to $1.0176 after touching $1.0155, the least since March 4.

New Zealand’s currency has appreciated 6.6 percent in the past 12 months against the greenback.

To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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