By Ashley Smith – The Australian and New Zealand Dollars continued their decline today on concern China will maintain its efforts to curb loan growth, reducing demand for higher yielding assets. Australia’s currency dropped to 91.37 U.S. cents from 92.32 cents in New York yesterday. The currency fell 0.9% to 82.97 Yen. New Zealand’s Dollar slid over 1% to 72.12 U.S. cents, and declined to 65.50 Yen.
The New Zealand Dollar also dropped versus all of its 15 most traded counterparts after the release a government report which showed consumer prices unexpectedly fell last quarter. New Zealand’s consumer prices slipped 0.2% in the fourth quarter, worse than expected result. The unexpected result reduced speculation the Central Bank will raise interest rates, dampening demand for the currency. Reserve Bank of New Zealand Governor Alan Bollard stated last month he intends to keep interest rates at a record low until the middle of this year to stimulate the economy.
Meanwhile, the AUD rose earlier to its strongest level versus the EUR on prolonged concerns regarding the financial problems in Greece. Greece’s fiscal crisis has been very detrimental for the EUR. Furthermore, Australian consumer confidence rose in January by the most in 6 months, adding to signs the nation’s economy is healthy enough for Central Bank Governor Stevens to resume interest rate increases their coming February meeting.
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
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