Volatile day for NZ dollar

Friday, 10 October 2008

October 10 – Close: The New Zealand dollar had another volatile day today, falling to US59.08c.

The NZ dollar was at US59.30c at 5pm from US61.56c at 8am and US60.85c at 5pm yesterday.

"It is more an assessment of global growth driving it," said John Body, head of markets at ANZ.

He said both the Australian and New Zealand dollars were under extreme pressure for most of the day.

The Australian dollar fell to US66.15c from US69.06c yesterday.

"I think there has been a subtle shift this week from looking at yield to looking at global growth," he said.

Exporters are expected to suffer if there is a material slide in global economies, particularly in Asia.

The concerns about economic growth were also behind the dramatic slide in equity markets across Asia today.

He said it was extremely difficult to predict direction from here given the volatility of markets.

"We'll probably test the lows again," he said.

The NZ dollar may have to trade down to US58c before a strong base is found. The currency dipped below that level earlier this week.

Against the Australian dollar the NZ dollar was at A89.60c from A88.10c at 5pm yesterday.

And against the euro it was at 0.4382 from 0.4448 and 58.50 yen from 61.45.

The trade weighted index fell to 59.03 from 59.95.

NZPA