New Zealand Dollar Falls on Central Bank Governor Interview

The New Zealand dollar started this week losing versus the greenback and the yen as higher-yielding currencies attractiveness declined while risk aversion grew among traders globally, shunning investors from assets in the South Pacific region.

After a radio interview in which Allan Bollard, Reserve Bank of New Zealand Governor, stated that a strong kiwi is affecting the nation’s exports performance, the New Zealand currency declined versus most of the 16 main traded currencies, also influenced by a negative performance in Asian stock markets, mainly in China, where the Shanghai Composite Index declined more than 6 percent, decreasing attractiveness for the relatively riskier trading options in New Zealand and Australia.

A decline in the kiwi rates will be extremely favorable for New Zealand’s economic recovery, according to specialists. The bullish patterns perceived in the last two months for the New Zealand currency may delay the recovery in the South Pacific nation, as a strong currency declines competitiveness for a country’s products, but as long as volatility remains high, with multiple reports proving support for contradictory speculations, it will be difficult to determine how well the kiwi will perform, as well as the New Zealand economy as a whole, considering its export-oriented profile.

NZD/JPY traded at 63.45 as of 10:54 GMT from an opening rate of 63.74 yesterday. NZD/USD followed the same trend, being traded at 0.6839 from 0.6815.

If you have any questions, comments or opinions regarding the New Zealand Dollar,
feel free to post them using the commentary form below.