NZ dollar hits seven-year low against aussie

04 Jul 2008 08:45NZPA

The New Zealand Dollar slipped against a rallying greenback overnight, and also dropped to a new seven-year low against the Australian currency.

By 8am the kiwi was buying US75.64c from US76.03c at 5pm yesterday, while against the aussie it dipped to around A78.60c from A79.04c, then partially recovered to A78.76c by today's local open.

The United States dollar rally came after payroll data suggested the US job market and economy were not as dire as many investors had feared, while the European Central Bank (ECB) president struck a less aggressive tone on prospects for interest rate hikes.

ECB President Jean-Claude Trichet said the current level of euro zone interest rates would help achieve the bank's price stability goal.

The ECB earlier raised its key rate by a widely expected quarter percentage point to 4.25 percent.

Bank of New Zealand currency strategist Danica Hampton said the the NZ dollar was dragged down against the greenback by the plunge in the euro against the US currency.

By 8am the NZ dollar was buying 0.4818 euros, up from 0.4787 at yesterday's local close.

The kiwi showed little movement against the Japanese currency, opening locally at 80.73 from 80.68 at 5pm.

Ms Hampton said global equities and risk appetite continued to feel a little shaky.

Any further deterioration in risk appetite would likely temper appetite for high-yielding currencies such as the kiwi, leaving it vulnerable on crosses such as against the yen.

US markets will be closed on Friday (local time) in observance of the US Independence Day holiday.

 
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