23 Jun 2009

NZ dollar down again

9:55 pm on 23 June 2009

The New Zealand dollar fell by more than 2% against the US currency on Tuesday as fears over the global economic outlook pushed investors away from buying currencies such as the Kiwi.

On Tuesday, the Kiwi fell below US63 cents after the World Bank warned of weaker than expected global growth.

The bank cut its 2009 forecasts for most economies, saying that prospects remain worse that most had predicted.

Radio New Zealand's economics correspondent reports the New Zealand dollar has been in strong form in recent weeks as investors returned to riskier currencies in expectation of a swift recovery in world growth.

However, the Kiwi has lost ground against the yen and euro as well as the US dollar as investors again bought currencies of larger economies.

BNZ currency strategist Danica Hampton says $NZ4.6 billion worth of bonds are due to mature next month, which could pose a potential down-side risk to the Kiwi.

But she says the falls may provide some relief to exporters and help New Zealand's economic recovery.