By TraderVox.com
The New Zealand dollar still continues to almost a week’s low as demand for the Australian counterpart has been limited by poor showing of the export prices which was lower for the second time. This also came prior to an IMF meeting set to start today in Washington. This meeting is aimed at discussing the current fiscal problems in Europe.
According to Kurt Magnus of Namura Holdings Inc. in Sydney, the market expects the situation in Europe to deteriorate as there is no confidence in the equity market. He expects the Aussie to go down against the dollar as the next phase of European debt crisis emerges. He also said that the export price index report in Australian has played a big role in the dropping of the Aussie.
The Export Price Index declined by 7 percent from the figure registered in the fourth quarter making it the second decline. In the fourth quarter of last year, it had declined by 1.5 percent; the market was expecting a drop of 3 percent. However, the south pacific dollars held ground against the yen as speculation of Bank of Japan monetary easing strengthened after Shirakawa, the BOJ Governor, indicated in a speech yesterday that the Bank would pursue powerful easing program.
The Aussie exchanged at $1.0336 which represents a 0.3 percent decline this week. The Australian dollar was little changed against the yen trading at 84.29. New Zealand dollar was trading at 81.33 US cents down from 81.37 registered yesterday. Earlier, the Kiwi had touched 81.22, the lowest it has been since April 10. The currency has fallen 1.2 percent since the start of the week. Against the yen, New Zealand dollar is trading at 66.31 yen.
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