Bloomberg News

New Zealand Dollar Drops as European, U.S. Data Damp Risk Demand

May 02, 2012

New Zealand’s dollar fell to the lowest level in more than five weeks versus its U.S. counterpart after weaker-than-forecast economic data in Europe and the U.S. reduced demand for higher-yielding currencies.

Australia’s dollar touched a one-week low against the greenback as stocks and commodities slumped. Both South Pacific currencies strengthened earlier after a Chinese manufacturing index rose in April. They erased the gains after reports showed European manufacturing shrank in April and U.S. companies added fewer workers than forecast.

New Zealand’s dollar, nicknamed the kiwi, dropped 0.6 percent to 81.08 U.S. cents yesterday in New York and reached 80.87 cents, the weakest since March 22. The kiwi slumped 0.5 percent to 64.97 yen.

Australia’s dollar lost as much as 0.5 percent to $1.0285, the weakest since April 24, before trading little changed at $1.0333. It gained 0.2 percent earlier. The Aussie was little changed at 82.78 yen.

The MSCI World Index (MXWO) of stocks weakened 0.4 percent, and the Thomson Reuters/Jefferies CRB Index of raw materials lost 1.3 percent.

A purchasing-manager index of euro-region manufacturing shrank for a ninth month, falling to a 34-month low of 45.9 in April from 47.7 in March, according to London-based Markit Economics. A reading below 50 shows contraction.

U.S. companies’ payrolls increased by 119,000 workers last month, after a revised 201,000 gain in March, according to Roseland, New Jersey-based ADP Employer Services. The median forecast of economists in a Bloomberg News survey was for a 170,000 advance.

The 49.3 final reading of a Chinese factory gauge released yesterday by HSBC Holdings Plc and Markit Economics compared with a preliminary 49.1 reported April 23 and a final 48.3 in March.

To contact the reporter on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net


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