NZ Dollar Slides Against Majors

NZ Dollar Slides Against Majors

The New Zealand dollar declined against other major currencies in the Asian session on Wednesday as traders sold riskier assets in response to Spain's denial for an imminent bailout.

Spanish Prime Minister Mariano Rajoy on Tuesday watered down expectations for an immediate Eurozone bailout for his struggling country. He also noted that he is studying the possibility for seeking an European Union financial aid.

Adding to concerns, the Asian Development Bank today downgraded the economic growth outlook for developing Asia, citing dimming global growth prospects and soft domestic demand in the region's two largest economies.

In a report titled Asian Development Outlook 2012 Update, the lender sharply cut the region's growth forecast for this year to 6.1 percent from 6.9 percent forecast in April. Growth is seen at 6.7 percent for 2013, down from 7.3 percent predicted in April.

A weak China's service sector activity also dented sentiment as China non-manufacturing PMI fell to 53.7 in September from 56.3 in August.

The kiwi touched 0.8218 against the U.S. dollar and 1.5704 against the euro, it lowest levels in a week. The kiwi is likely to find next downside target level at 0.815 against the greenback and 1.58 against the euro.

Against the yen, the kiwi hit a 6-day low of 64.27, compared to yesterday's close of 64.71. If the kiwi slides further, it may target 64.00 level.

The kiwi that advanced against the aussie after Australia's trade data reversed direction shortly. The NZ dollar slipped to 1.2442 versus the aussie and kiwi may break downside target level at 1.25.

Australia recorded a seasonally adjusted merchandise trade deficit of A$2.027 billion in August, the Australian Bureau of Statistics said today.

That was well shy of forecasts for a shortfall of A$685 million following the downwardly revised A$1.530 billion deficit in July - which was originally pegged as a A$556 million deficit.

In the European session, Eurozone retail sales for August and PMI's from major European economies are due.

From the U.S., ADP employment data and ISM non-manufacturing composite index for September are likely to garner attention in the New York morning session.