16 Mar 2012

NZ dollar falls against US currency

6:57 am on 16 March 2012

The New Zealand dollar has slipped to a seven week low as investors chase the US dollar.

Just before midday on Thursday, the kiwi was buying 81 US cents, a fall of more than 1.5 cents against the American currency since the day before.

Rankin Treasury director Derek Rankin says investors are buoyed by positive data and comments about the US economic recovery.

"You're generally seeing something we haven't seen for a while now, and that is better US data delivering a stronger US dollar."

He says current perceptions are that the European situation is stabilised, that USA is slowly getting better and that China is managing its slow down quite well, which has resulted in a stronger US dollar.

Mr Rankin says he's not sure that thinking will be right in the longer term.

He says the Australian dollar is also coming under some pressure and Australia has had some poor data, with growth rates half what was expected, unemployment numbers up and a trade deficit instead of the expected bigger trade surplus.

Mr Rankin expects the kiwi to stabilise at about 79 US cents in the short-term.