NZ dollar extends slide against euro, greenback as Yellen speech awaited
The New Zealand dollar extended its slide against the euro after a stronger-than-expected survey of German business confidence left traders short of the European common currency.
The kiwi fell to 69 euro cents at 5pm in Wellington, from 69.87 cents at 5pm yesterday. The local currency slipped to 75.75 US cents from 76.40 cents yesterday.
The euro strengthened after Germany's IFO business climate index increased for a fifth month, adding to strong manufacturing data a positive ZEW economic sentiment survey. With the Greek standoff hanging over the euro, traders have seen little reason to bet on gains in the currency, leaving them vulnerable to good new from Europe.
"The market was caught well short of euros," said Mitchell McIntyre, a dealer at NZ Forex.
Data this week showing New Zealand recorded a smaller-than-expected trade surplus in February and the biggest annual deficit in more than five years had weighed on the kiwi, as did a decline in prices at the latest GlobalDairyTrade auction, McIntyre said.
Still, he said the kiwi may re-test its recent highs against the greenback and sees it trading in a range of 75.50 US cents to 76.20 cents in the next 24 hours.
Traders are now awaiting US Federal Reserve Chair Janet Yellen, who is scheduled to speak at the Federal Reserve Bank of San Francisco Conference on Friday on "The New Normal for Monetary Policy".
McIntyre said the Fed's main concern is for stability and Yellen probably won't be dropping any bombshells.
The New Zealand dollar trade at 96.95 Australian cents from 96.86 cents yesterday and fell to 50.87 British pence from 51.37 pence. It declined to 90.19 yen from 91.37 yen. The trade-weighted index slipped to 78.99 from 79.49 yesterday.