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NZ Dollar Trims Losses vs. US Dollar & Japanese Yen

November 13, 2013 at 1:57 by Vladimir Vyun

Some coins on NZD notesThe New Zealand fell against its US counterpart yesterday, but is trying to rise today. The currency also erased earlier losses versus the Japanese yen.

The Reserve Bank of New Zealand released its Financial Stability Report. The report was fairly optimistic, saying:

New Zealand’s financial system remains sound. The banks are well capitalised and have strengthened their funding base, while non-performing loans continue to fall.

Yet it mentioned some problems, including the high level of household sector indebtedness and the risk of housing bubble. Regarding the world economy, the view was also rather positive:

International financial market conditions have continued to improve, but remain fragile, as major economies continue to cope with imbalances revealed by the Global Financial Crisis.

Among risks for global economic growth, the central bank mentioned the US debt ceiling and the probability of quantitative easing reduction, the eurozone debt issues and the slowdown of Chinese economic growth. These risks are the likely contributors to the current weak performance of the New Zealand currency.

NZD/USD traded at 0.8229 as of 1:57 GMT today following yesterday’s drop from 0.8250 to 0.8219 and today’s decline to the daily low of 0.8193. NZD/JPY rebounded to 81.92 after falling from 81.88 to 81.62.

If you have any questions, comments, or opinions regarding the New Zealand Dollar, feel free to post them using the commentary form below.

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