Kiwi, Canadian dollars
sink on domestic woes
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[May 11, 2017]
By Patrick Graham
(Reuters) - The New Zealand dollar sank to an almost one-year low and
its Canadian counterpart by roughly half a percent on Thursday as
domestic concerns outweighed a bounce in oil prices for the
The kiwi sank by as much as 1.5 percent after the Reserve Bank of New
Zealand shocked markets by sticking with a neutral bias on policy,
warning investors they were reading the outlook wrong and expressing
approval of the currency's falls this year.
In Canada, normally a big gainer when oil prices are rising, a downgrade
of Canadian banks by ratings agency Moody's sent the dollar lower.
"The positive impact from Wednesday's recovery in commodities has faded
into Thursday, with central bank risk and rating agency downgrades
casting a darker shadow," said Joel Kruger, a strategist with currencies
"In New Zealand, the RBNZ struck a surprisingly dovish chord in its
latest policy decision, while in Canada, Moody's has come out with a
downgrade of Canada's big six."
By 1035 GMT (6.35 a.m. ET), the kiwi was 1.35 percent lower on the day
at $0.6848, having hit an 11-month low of $0.6818 earlier.
The Canadian equivalent traded 0.3 percent weaker at $1.3695.
The yen, U.S. dollar and euro were all holding in tight ranges, the
dollar edging lower after hitting an eight-week high against the yen in
One riser in the European morning was the Swedish crown, up on higher
than expected inflation numbers and backed more generally by a number of
major banks and currency managers as a good bet to gain if the euro
zone's economic outlook continues to improve this year.
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Reserve Bank of New Zealand dollar notes are pictured in Singapore
June 22, 2006. REUTERS/Dennis Owen/File Photo
Sterling <GBP=>, a gainer in the past month following Prime Minister
Theresa May's announcement of a snap election for June 8, slipped ahead
of a closely watched "Super Thursday" of publications by the Bank of
The pound has struggled to climb past $1.30 this week and another weaker
than expected batch of data, this time on industrial output and trade,
knocked around 0.2 percent off sterling in morning trade in London.
"I actually suspect sterling is looking a bit vulnerable here," Ilya
Spivak, a currency strategist with IG Group in London.
"The priced-in policy outlook has firmed up a bit in recent weeks. The
data outcomes have stabilized somewhat ... but the BOE is no more
optimistic. They have said time and again that they are reluctant to
take the data at face value because of Brexit-related worries."
(Editing by John Stonestreet and Raissa Kasolowsky)
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