News Service from House Harris

NZ dollar drops to lowest level in six years

WELLINGTON, Nov 21 NZPA - As recession fears shook world markets the NewZealand dollar sank to six-year lows.

There was so much bad news around it was hard to know where to start. All three major US stock indexes ended sharply lower due to deepening economic fears and investors' flight from risk.

Investors sought shelter in safe assets such as US Treasury bonds, and the US dollar slumped versus the yen, but both rose against the euro.

The number of Americans filing for jobless benefits spiked to a 16-year high of 542,000 last week.

Equity markets in Asia plunged. In New Zealand, Fonterra slashed its forecast payout to dairy farmers.

Against an overwhelmingly bleak backdrop the NZ dollar touched US52c during its domestic session, dealers said. It climbed to US52.88c at 5pm from US54.09c at the same time yesterday.

By today's local close the kiwi was at 49.95 yen from 51.70 yesterday.

Against the euro it was at 0.4248 from 0.4325 yesterday.

The Reserve Bank of Australia intervened to support the Australian dollar. The NZ dollar was at A85.65c at 5pm from A84.78c yesterday.

The trade-weighted index was down to 54.63 at 5pm from 55.51 at 5pm.

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