The New Zealand dollar fell more than one percent on Monday as renewed doubt about a US economic recovery and falling stock markets triggered selling in riskier, higher yielding currencies. It came under pressure after US consumer confidence fell in August for the second straight month, raising concerns about the outlook for the US economy.
Asian stock markets also fell, with Hong Kong and Tokyo down over two percent. "The New Zealand markets will no doubt chop around depending on how global equities and data pan out," said Bank of NZ senior economist Craig Ebert. The kiwi stood at around $0.6689/94, extending Friday's retreat from 10-month highs at $0.6880. The currency settled around $0.6790/96 in late local trade on Friday. The kiwi rose against the Aussie, however, after breaking through key resistance levels, triggering stop-loss cover of short positions.
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