The New Zealand dollar limped quietly into the Christmas holiday period on Wednesday, with little investor interest in the currency or appetite for risk amid a deteriorating global outlook. Kiwi trades a wafer-thin range around $0.5675/85, easing from 0.5739/46 in offshore trade after data showed New Zealand's recession deepening.
Economists see the recession extending well into 2009, requiring further central bank rate cuts and fiscal stimulus from the government. Data showed recessions in Britain and the United States worsening, while Spain also joined the "recession club".
Support for the kiwi seen at $0.5550-0.5600 with $0.5900 likely to cap any move higher. The dollar dipped against the yen in light selling from Japanese exporters a day after dismal US growth and housing data suggested a prolonged recession ahead. NZ financial markets closed until December 29. Local activity expected to be thin through to mid-January.
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