16 Jul 2009

NZ dollar dips on back of credit rating drop

8:48 pm on 16 July 2009

The dollar fell more than a cent against the US dollar on Thursday afternoon, after Fitch Ratings cut New Zealand's rating outlook from stable to negative.

Fitch says that, despite the recession, the current-account deficit remains large and is expected to remain above the level needed to reduce New Zealand's net foreign liabilities.

At 5pm Thursday the dollar was sitting at 64c US. It was also buying 80.02 Australian cents, 38.97 pence, 59.97 Yen and .45 euro, while the TWI stood at 60.21c.

On the markets the NZX 50 index rose 37.4 points, or 1.35%, to close at 2801 on turnover of $77 million.

Telecom was up 5c to $2.69, Fletcher Building up 17c to $6.84 and Contact Energy up 11c to $5.91. Fisher and Paykel Healthcare rose 6c to $2.9.

Across the Tasman, the Australian sharemarket posted a third successive day of strong gains. The benchmark S&P/ASX200 index closed up 71.1 points, or 1.81%, at 3,995.6, while the broader All Ordinaries gained 70.3 points, or 1.79%, to 3,987.8.

The Australian dollar closed flat at 79.67 US cents.