Kiwi declines on interest rate cut

Story link: Kiwi declines on interest rate cut

The yen strengthened Thursday as investors pulled away from purchases of higher-yielding currencies while the New Zealand dollar weakened after the central bank there cut interest rates by more than had been expected.

The Reserve Bank of New Zealand cut interest rates there by half a percentage point to 7.5 percent, saying that with retail sales and farm exports down and unemployment up, the New Zealand economy is in a recession.

At late morning in New York, the kiwi was worth 64.68 cents US while it took ¥68.858 to buy a New Zealand dollar.

The Australian dollar was also weaker, hurt by declines in metals prices, but declines were held in check as a new report showed that the Australian economy gained 14,600 jobs in August.

In New York at late morning, it took 79.35 cents US to buy an Australian dollar while the Aussie was worth ¥84.4918.

The yen was also stronger in relation to the US dollar and the euro on the retreat from risk, with the yen trading at ¥106.48 to the greenback and at ¥148.1455 to the shared currency.

The US dollar strengthened versus the euro ahead of a new report, due tomorrow, that is expected to show that industrial production declined in the Eurozone again in July.

Late morning trade in New York found the dollar trading at $1.3916 to the euro.