Forexpros – The New Zealand dollar dropped to a four-day low against its U.S. counterpart on Tuesday, as pessimism over the handling of the debt crisis in the euro zone weighed on demand for riskier assets.
NZD/USD hit 0.7872 during late Asian trade, the pair’s lowest since October 12; the pair subsequently consolidated at 0.7887, falling 0.32%.
The pair was likely to find support at 0.7760, the low of October 11 and resistance at 0.8056, the high of October 14.
Risk appetite was dampened on Monday after German finance minister Wolfgang Schaeuble said that the next European summit on October 23 would not result in a definitive solution to the debt crisis in the single currency bloc.
German Chancellor Angela Merkel had also dismissed the “dreams” of unveiling a plan by the end of the week.
Also Tuesday, official data showed that China’s gross domestic product ticked down to 9.1% in the third quarter, from 9.5% the previous quarter, easing investors’ fears of a more intense slowdown of the country’s economy.
Meanwhile, the kiwi was lower against the Australian dollar with AUD/NZD gaining 0.27%, to trade at 1.2865.
Earlier in the day, the minutes of the Reserve Bank of Australia’s most recent policy meeting signaled a potential rate cut in the near future.
According to the report, RBA policymakers believed that “an improved inflation outlook, if confirmed by further data, would increase the scope for monetary policy to provide some support to demand, should that prove necessary.”
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