NZ dollar falls to two-week low vs yen as investors shun riskier assets
By Tina Morrison
May 16 (BusinessDesk) – The New Zealand dollar slid to a two-week low against the yen as investors shied away from
so-called riskier currencies in favour of safe havens.
The kiwi touched 87.43 yen early this morning, its lowest level since April 29, and was trading at 87.73 yen at 8am in
Wellington, from 88.43 yen at 5pm yesterday. The local currency weakened to 86.38 US cents from 86.84 cents yesterday.
The Japanese currency strengthened after reports showed lower-than-expected first quarter gross domestic product in
Europe, a softer US housing market, an unexpected decline in US industrial production in April, while tensions between
the Ukraine and Russia continued. Adding to demand for the yen, the nation’s first quarter economic growth exceeded
forecasts.
“In times of risk aversion, the New Zealand dollar weakens and the Japanese yen strengthens,” ANZ Bank New Zealand
senior economist Mark Smith and senior foreign exchange strategist Sam Tuck said in a note. “This cross is showing signs
of risk aversion.”
The kiwi will probably trade between 87.25 yen and 88.25 yen today, ANZ said.
Today, Prime Minister John Key, Finance Minister Bill English and Economic Development Minister Steven Joyce are
speaking to business audiences following the announcement of the 2014 budget yesterday, where the government signalled
bigger fiscal surpluses in an economy seen to be growing faster than previously thought.
Traders will also be eyeing US Federal Reserve Chair Janet Yellen’s speech to the US Chamber of Commerce, scheduled
shortly after 10am New Zealand time today.
The New Zealand dollar weakened to 62.99 euro cents from 63.32 cents yesterday. Euro-area GDP rose 0.2 percent in the
first quarter, half as much as economists had forecast, increasing speculation the European Central Bank will add more
stimulus at its meeting next month.
The kiwi slipped to 51.43 British pence from 51.77 pence yesterday, and dropped to 92.29 Australian cents from 92.61
cents. The trade-weighted index fell to 80.32 from 80.72 yesterday.
(BusinessDesk)