The New Zealand dollar plunged to a near 6 1/2 year low versus the US dollar during Monday's Asian trading as a slump in equities forced investors to liquidate their positions in higher-yielding assets.
The Kiwi slumped to a 7-month low versus the Aussie, a new multi-week low versus the euro and a 6-day low against the yen. At the same time, the Australian currency declined to a new multi-week low against the US dollar and new multi- day lows versus the European currency and the Japanese yen.
The slump in kiwi and the Aussie is due to a stronger US currency. The US dollar, which assumed the status of safe-haven, gained support as US stocks closed near a 12-year low on Friday on poor GDP figures. The new rescue attempt for Citigroup also boosted greenback's status as a safe haven.
The US gross domestic product fell 6.2 percent in the fourth quarter compared to the previously reported 3.8 percent decrease. Economists had been expecting fourth quarter GDP to be revised to show a 5.4 percent decrease.
The Australian and New Zealand currencies came under selling pressure as stocks markets in their respective region slid as worries about the health of the U.S. financial sector resurfaced.
Australian stocks have fallen, but have recovered slightly after hitting a new five-year low today. The All Ordinaries index dropped 2.8 per cent to 3,204 points, and the ASX 200 shed 94 points to 3,250.
New Zealand benchmark NZSX-50 index closed down 40.802 points at 2481.515.
Last Friday, Reserve Bank of New Zealand Governor Alan Bollard said the economy would not escape unscathed in the current financial crisis. Addressing the 2009 Job Summit in Auckland, Bollard said, "The economy does have a number of imbalances that cannot go on forever and as a result, there are challenges ahead."
He said many of the challenges stem from the very rapid increases in debt across household, farm and corporate sector that occurred over the past few years, financed from offshore.
Thus far this year, the New Zealand dollar declined 19 percent against the US dollar and Australian dollar dropped 13 percent on worries about the global recession fears. The central banks of both the countries slashed interest rates to boost their economy.
The Reserve Bank of Australia is scheduled to meet tomorrow to decide on interest rate. Investors are already pricing a 25 basis point cut, with some expecting a bigger 50 basis point cut.
With more economic reports from New Zealand showing weakness, the Reserve Bank Of New Zealand is widely expected to trim the rates to 2.75 percent from 3.5 percent when the bank meets on March 12. New Zealand posted a January trade deficit of NZ$187 million, making it the smallest deficit for the month of January since 2001. Unemployment in New Zealand increased to a five-year high in the final quarter of 2008, manufacturing activity shrinked and service sector shrinked for 10Th straight month in January.
On January 28, the Reserve Bank of New Zealand slashed its Official Cash Rate by 150 basis points to a record low 3.50 percent, which means that the Official cash rate has been reduced by 475 basis points since July 2008.
In early Asian trading on Monday, the New Zealand dollar tumbled to its weakest point since October 2002 against the US dollar. The kiwi touched 0.4915 against the greenback by about 7:30 pm Eastern Time. The pair that closed last week's deals at 0.5004 is now trading at 0.4936. On the downside, the New Zealand currency may likely target the 0.485 level against the buck.
During Monday's early Asian trading, the New Zealand kiwi dropped to a 6-day low of 47.80 against the Japanese yen. This may be compared to Friday's New York session closing value of 48.83. If the kiwi slides further, 46.7 is seen as the next target level.
Against its European counterpart, the New Zealand currency declined to a new multi-week low during Monday's Asian session. At about 7:30 pm Eastern Time, the NZ dollar touched 2.5602 against the single currency, down from Friday's closing value of 2.5333. The next downside target level for the New Zealand currency is seen at 2.581 level.
The New Zealand dollar edged down against its Australian counterpart during Monday's early Asian trading. At about 10:10 pm Eastern Time, the NZ dollar plunged to a 7-month low of 1.2865 against the Aussie. If the kiwi ticks down further, 1.297 is seen as the next likely target level. At Friday's North American session close, the Aussie-kiwi pair was quoted at 1.2789.
Meanwhile, The Australian dollar fell against its major counterparts today as survey results reported by the Australian Industry Group and PriceWaterhouse showed that manufacturing activity in Australia contracted to the lowest level on record in February. The group's Performance of Manufacturing Index dropped 4.9 points from January to a record low of 31.7. It marked the 9th straight monthly decline.
On the other hand, the Housing Industry Association reported today that January new home sales in Australia increased 8.3 percent compared to the month before. The HIA's survey results showed detached home sales increased 9.8 percent on months and rose 3.0 percent for the three months to January.
The Australian dollar edged down to 0.6300 against the US dollar during early Asian deals on Monday. This set the lowest point for the aussie-dollar pair since February 3, 2009. If the pair falls further, 0.625 is seen as the next target level. The pair that closed Friday's North American session at 0.6392 is currently trading at 0.6330.
The Aussie that climbed to a 3-month high of 0.7269 the buck earlier this year, started ticking down thereafter. However, the Australian currency recovered some of its losses after falling to a 5-week low of 0.6251 on February 02. But the uptrend was short lived as the Aussie pulled back again after 1-week and has lost around 8 % thus far.
Against the European currency, the Australian dollar showed weakness during Monday's early Asian deals. At 7:25 pm ET Sunday, the Aussie touched a 10-day low of 1.9969 against the euro, compared to 1.9821 hit late New York Friday. The euro-Aussie pair is currently quoted at 1.9862 with 2.00 seen as the next target level.
The Australian currency traded down against the Japanese yen during Monday's early Asian trading. At 7:45 pm ET, the aussie-yen pair declined to a 6-day low of 61.20, compared to Friday's closing value of 62.36. The next downside target level for the pair is seen around 58.9. The pair is now worth 61.81.
The Australian dollar that closed Friday's New York deals at 0.8145 against its Canadian counterpart dropped to 0.8061 at 7:30 pm ET Sunday. On the downside, 0.801 is seen as the next target level for the pair. The aussie-loonie pair is presently trading at 0.8097.
The Manufacturing PMI reports from Italy, France, Germany, Euro-zone and inflation figures from Italy and Euro-zone are expected to influence trading in the European session today.
Meanwhile, across the Atlantic, US personal consumption expenditure, construction spending and ISM manufacturing reports may early New York session.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.