New Zealand dollar hit by risk aversion

The New Zealand dollar was buffeted yesterday by falls in equity markets and decreased demand for riskier assets and high yielding currencies. Domestic data over the last week still paints a gloomy picture for the local economy, and investors are still pricing in a 50 basis point rate cut when the Reserve Bank of New Zealand meets next week. Local data remains sparse this week, so the kiwi will continue to be largely guided by broader market movements.