21 Nov 2013

Kiwi falls nearly a cent against US dollar

7:29 pm on 21 November 2013

The New Zealand dollar fell nearly a cent against the US dollar on Thursday but was little changed against other major currencies after the Federal Reserve signalled it could wind back on printing money as soon as March.

Bancorp Treasury Services senior advisor Peter Cavanaugh says that caused the US dollar to rally.

He says the minutes of the Federal Reserve's October meeting were released showing the Federal Reserve is still on track to reducing its bond buying stimulus which prompted the US dollar to strengthen.

Mr Cavanaugh says the Australian dollar and the euro were also down against the US, but there was little change in the New Zealand dollar against those two currencies.

At about 5pm, the kiwi was trading at 82.51 US cents, 88.65 Australian cents and 0.6147 euro.

It fell slightly to 51.28 British pence and to 82.81 yen.

Sharemarket down

The sharemarket fell with the Top 50 Index down 22 points to 4818.

Murray & Co director Johnny Cochrane says Air New Zealand sank for a second day after the Government's sale of a 20% stake in the company.

He says it was primarily institutional investors and some of them thought the stock would rise after the issue closed but that didn't happen and so they are now selling.

Mr Cochrane says given that Air New Zealand is one of the cheaper airlines in the world, but also one of the higher quality airlines given its monopolistic position, its stock price could rally over time.

Air New Zealand shares fell 3 cents to $1.535 compared with the $1.65 the Government sold the shares at.

Mr Cochrane says the share prices for Xero and Ryman fell and it's likely they are suffering after great performance in the last couple of months.

Xero shares dropped 86 cents to $34.80 and Ryman sank 5 cents to $7.79.