New Zealand And Australian Dollars Tumble Against Majors

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The New Zealand and Australian dollars plunged against their major counterparts during Thursday's Asian trading as a slump in most Asian equities forced investors to reduce holdings of higher-yielding currencies.

The NZ dollar fell to new multi-month lows against the currencies of Australia, Europe and Japan. Meanwhile, the kiwi slipped to a 2-day low against the US dollar.

At the same time, the Australian currency declined to new multi-week lows versus the European currency, Canadian dollar and the Japanese yen.

Asian stock markets dropped today as mostly positive economic news in the U.S. failed to inspire investors and the dollar tumbled to a 14-year low against the Japanese yen.

Gold, meanwhile, hit a new record high of $1,196.8 an ounce as investors increased their bets on commodities to hedge against the sinking dollar.

Concerns the greenback will continue to languish were running high following indications the U.S wasn't overly concerned about its currency's slide and will keep interest rates at ultra low levels for some time.

That helped dragged the dollar as low as 86.27 yen -- its weakest since July 1995. The rising Japanese currency in turn hit shares of major exporters like Toyota and Canon whose overseas profits and competitiveness erode with a stronger yen.

Japan's Nikkei 225 index lost 0.6%, Australia's S&P/ASX 200 dropped 0.4%, China's Shangai Composite index declined 2.65%, Hong Kong's Hang Seng slipped 1.6% and South Korea's Kospi fell 0.8%.

However, the New Zealand stocks rose slightly today. The benchmark NZX 50 index climbed 11.92 points or 0.38% at 3,127.31.

Analysts at Westpac said today that both AUD and NZD have lost ground against the USD and JPY. "While both currencies can weaken further from here we still view both currencies as buys on dips", Westpac noted.

In Asian trading on Thursday, the New Zealand dollar tumbled to a 2-day low against the US dollar. The kiwi touched 0.7230 against the greenback by about 12:20 am Eastern Time. The pair closed yesterday's deals at 0.7328. On the downside, the New Zealand currency may likely target the 0.7097 level against the buck.

No economic reports are scheduled to be released from the U.S. on Thursday due to the 'Thanksgiving Day' public holiday.

During Thursday's early Asian trading, the New Zealand kiwi dropped to a new multi-month low of 62.49 against the Japanese yen. This may be compared to Wednesday's New York session closing value of 64.03. If the kiwi slides further, 62.8 is seen as the next target level.

The Japanese yen has been rallying against other major currencies today, rising beyond the 87 level against the US dollar for the first time in 14-years on hopes that the Japanese monetary authority will tolerate further appreciation of the currency. Japanese Finance Minister Hirohisa Fujii said the government is watching currencies "very closely" and said that government would take appropriate measure if currency moves are 'abnormal'.

Against its European counterpart, the New Zealand currency declined to a new multi-month low during today's Asian session. At about 12:20 am Eastern Time, the NZ dollar touched 2.0908 against the single currency, down from Wednesday's closing value of 2.0674. The next downside target level for the New Zealand currency is seen at 2.107 level.

The kiwi has been falling sharply against the yen and the euro since November 19 and has lost around 6% and 4%, respectively since then.

The New Zealand dollar edged down against its Australian counterpart during Thursday's early trading. At about 7:55 pm Eastern Time, the NZ dollar plunged to a 5 1/2 -month low of 1.2779 against the Aussie. If the kiwi ticks down further, 1.291 is seen as the next likely target level. At yesterday's North American session close, the aussie-kiwi pair was quoted at 1.2736.

Against the Aussie, the kiwi drifted lower since October 06 when the Australian central bank unexpectedly raised its interest rate from a 49-year low. Since then, the kiwi has depreciated around 6.5%

The Australian dollar edged down to 0.9209 against the US dollar during Asian deals on Thursday. If the pair falls further, 0.906 is seen as the next target level. The pair closed Wednesday's North American session at 0.9323.

The fall in Australian dollar can be attributed to Q3 capex data as the capital expenditure fell unexpectedly. The report showed a 3.9 per cent fall in private capital expenditure in the third quarter, compared with an economists expectation of a rise of 1%,but planned investment for 2009/10 was revised up sharply.

Against the European currency, the Australian dollar showed weakness during Thursday's Asian deals. At 12:10 am ET, the Aussie touched a 3-week low of 1.6404 against the euro, compared to 1.6242 hit late New York Wednesday. The Aussie may likely find support near the 2.00 level versus the euro.

The Australian currency traded down against the Japanese yen during today's Asian trading. At 11:55 pm ET, the aussie-yen pair declined to more than a 3-week low of 79.59, compared to Wednesday's closing value of 81.44. The next downside target level for the pair is seen around 78.91.

The Australian dollar that closed Wednesday's New York deals at 0.9746 against its Canadian counterpart dropped to 0.9675 at 12:15 am ET Thursday. This set a 3-week low for the pair. On the downside, 0.801 is seen as the next target level for the pair.

Looking ahead, the Italian business confidence for November and trade balance for October and the Euro-zone October M3 money supply reports are expected in the upcoming hours.

(Market News Provided by RTTNews)