NZ dollar heads for 0.4% decline as greenback strengthens on yen
The New Zealand dollar is headed for a 0.4 percent decline this week as a weaker yen strengthened the US dollar, pulling all other currencies down against it.
The kiwi slid to 78.81 US cents at 5pm from 79.15 cents at 8am on Monday. The trade-weighted index edged lower to 78.29 from 78.38 on Monday.
The yen plunged to a seven-year low against the greenback after Japanese prime minister Shinzo Abe called a snap election and postponed plans to hike the consumer tax for a second time as he seeks a mandate to continue economic reforms. The kiwi was further dented this week after dairy prices fell to their lowest level in more than five years in Fonterra Cooperative Group's fortnightly GlobalDairyTrade auction, underpinning concerns that lower milk prices will dent farmer incomes and weigh on economic growth.
"The Fonterra auction was disappointing once again so that took a bit of the steam out of the kiwi," said Michael Johnston, a senior trader at HiFX. "The US dollar has strengthened against the yen and so that US dollar strength has permeated elsewhere as well and that has helped pull down the kiwi."
In New Zealand next week, traders will be eyeing data on migration on Monday, visitor arrivals on Wednesday, trade on Thursday and building consents and the ANZ business confidence survey on Friday.
The New Zealand dollar advanced to 92.70 yen from 92.18 yen on Monday and gained to 91.23 Australian cents from 90.27 cents. It slid to 62.73 euro cents from 63.12 cents on Monday and weakened to 50.18 British pence from 50.44 pence.