The New Zealand dollar dropped the most in six weeks versus its U.S counterpart after the island nation’s economy grew less than forecast in the third quarter.
The Australian dollar declined for a third day against the greenback as U.S. stocks fell on concern American lawmakers are stalemated on a deficit-reduction deal, reducing demand for riskier assets. New Zealand’s currency fell versus all of its 16 most-traded counterparts as gross domestic product rose 0.2 percent in the three months ended Sept. 30 from the previous quarter, compared with a 0.4 percent gain forecast by economists in a Bloomberg survey, and second-quarter GDP was revised lower.
“Both currencies have been under pressure this entire week after the Reserve Bank of Australia signaled a willingness to induce greater monetary accommodation in their monthly meeting minutes,” Ravi Bharadwaj, a market analyst in Washington at Western Union Business Solutions, a unit of Western Union Co. (WU:US), wrote yesterday in a note to clients.
The New Zealand dollar, nicknamed the kiwi, fell 0.9 percent to 83.41 U.S. cents yesterday in New York after declining as much as 1 percent. That was the largest drop since Nov. 7. The kiwi decreased 0.7 percent to 70.39 yen.
Australia’s currency depreciated 0.5 percent to $1.0481. It sank 0.3 percent to 88.47 yen.
The S&P 500 Index (SPX) fell 0.8 percent.
In minutes released Dec. 18, the RBA cited a weaker labor market as a reason for its decision on Dec. 4 to cut interest rates. Policy makers at the meeting lowered the bank’s overnight cash-rate target to 3 percent, from 3.25 percent.
New Zealand’s dollar has strengthened 4.6 percent this year, the biggest increase among the 10 developed-nation currencies monitored by the Bloomberg Correlation-Weighted Indexes, and the Aussie has fallen 0.4 percent. The U.S. dollar has slipped 3.3 percent, and the yen has dropped 13 percent to lead decliners.
To contact the reporter on this story: Joseph Ciolli in New York at email@example.com
To contact the editor responsible for this story: Dave Liedtka at firstname.lastname@example.org