22 Sep 2011

Kiwi falls to six-week low

5:18 pm on 22 September 2011

The New Zealand dollar has fallen to a six-week low, following the release of modest economic growth figures and a gloomy growth prediction from the US Federal Reserve

The kiwi shed a couple of cents against its American counterpart on Thursday, then rebounded after a higher than expected payout to dairy farmers from the country's biggest company, Fonterra.

But it dipped below 80 US cents on the news that gross domestic product (GDP) had risen just 0.1% in the June quarter, which Westpac currency strategist Imre Speizer says is a significant disappointment for investors.

"The GDP data in particular is important," Mr Speizer says, "because it may well push the Reserve Bank into delaying its rate hikes even further - and that would push wholesale interest rates down and weigh on the kiwi."