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Forex - NZD/USD near 6-year trough as yuan devaluation still weighs

Published 08/12/2015, 02:41 AM
Updated 08/12/2015, 02:41 AM
Kiwi falls to fresh multi-year lows vs. greenback on China devaluation move

Kiwi falls to fresh multi-year lows vs. greenback on China devaluation move

Investing.com - The New Zealand dollar was trading near a fresh six-year trough against its U.S. counterpart on Wednesday, as news of a devaluation of the China's yuan on Tuesday continued to weigh broadly on Asian currencies.

NZD/USD hit 0.6468 during late Asian trade, the pair's lowest since July 2009; the pair subsequently consolidated at 0.6526, down 0.14%.

The pair was likely to find support at 0.6191 and resistance at 0.6635, Tuesday's high.

But the New Zealand dollar remained under pressure after China devalued its currency on Tuesday, in an attempt to help exporters after a recent spate of disappointing economic data.

The central bank described it as a “one-off depreciation” of nearly 2%, based on a new way of managing the exchange rate that better reflected market forces.

Earlier Wednesday, data showed that China's industrial production increased at by an annual rate of 6.0% in July, confounding expectations for a 6.6% gain.

Meanwhile, the greenback also remained weak after U.S. data on Tuesday painted a mixed picture of the strength of the economy.

The U.S. Bureau of Labor Statistics reported that unit labor costs increased by 0.5% in the three months to June, above forecasts for a gain of 0.1% and following rise of 2.3% in the first quarter.

The report also said that nonfarm business sector labor productivity increased by 1.3% in the second quarter, missing expectations for a gain of 1.6%.

The kiwi was higher against the Australian dollar, with AUD/NZD declining 0.46% to 1.1125.

Markets shrugged off a report published earlier by the Westpac Banking Corporation showing that Australia's consumer sentiment rose 7.8% this month after a 3.2% decline in July.

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