23 Nov 2010

Dollar slips after credit rating warning

8:34 am on 23 November 2010

The dollar dropped more than 1 cent against its American counterpart on Monday after New Zealand's credit rating was put on notice for a possible downgrade.

The warning came from international ratings agency Standard & Poor's.

A downgrade, which the agency says is a one-in-three chance, could cost New Zealand hundreds of millions in additional interest payments on its overseas debt.

Standard & Poor's New Zealand analyst Kyran Curry says a recent improvement in the current account deficit was not as strong as expected.

The New Zealand dollar is trading at about US77c on Tuesday morning.