Kiwi slumps against greenback

The New Zealand dollar fell more than a US cent yesterday, taking its losses for the week to about two-and-a-quarter cents, as the rate of coronavirus infection around the world escalates.

Economic consequences, as more major events are cancelled and travel-related companies downgrade earnings forecasts, are also rising.

The kiwi was trading at US61.27c at 5pm yesterday, up from the day’s low at US60.83c but down from US62.58c on Thursday. The domestic currency closed at US63.55c last Friday.

The downward spiral escalated after US President Donald Trump’s announcement of a ban on travel from Europe for 30 days, even as cases within the US escalate. That’s in the face of the US still lacking testing capability, suggesting the actual rate of infection there is much higher.

“I think with a lot of governments the reaction is knee-jerk,” said Forex director Pat Gilligan. “I think everybody’s battling with just how serious that community transmission’s going to be and where it’s going to end up.”

Gilligan said that for many people the news that movie star Tom Hanks had contracted the virus in Australia and that Canadian Prime Minister Justin Trudeau’s wife had been infected had brought home the seriousness of the situation.

The New Zealand dollar was trading at A97.41c at 5pm yesterday from US96.84c on Thursday. It was unchanged at 48.79 British pence, at 54.64 euro cents from €55.31c, at 64.29 yen from ¥64.71, and at 4.2924 Chinese yuan from 4.3638.

The bid price on the two-year swap rate rose to 0.7730 per cent from 0.7218 pre cent on Thursday.