NZD/USD Drops Below 0.80 as Wheeler Says Level Unjustified

New Zealand’s dollar slumped to the lowest level in more than a year after Reserve Bank Governor Graeme Wheeler called the currency’s level unjustified, invoking one of the central bank’s criteria for intervention.

The kiwi dropped at least 0.2 percent versus all of its 31 major counterparts after Wheeler said policy makers expect “significant further depreciation’ in the currency. A gauge of the U.S. dollar was poised for its highest close in more than four years as an improving economy boosted speculation the Federal Reserve will raise interest rates next year.

‘‘The governor has described the New Zealand dollar in this way before,’’ said Joseph Capurso, a currency strategist at Commonwealth Bank of Australia in Sydney. Wheeler’s ‘‘comment on the ‘unjustified and unsustainable’ exchange rate is another example of jawboning,’’ he said.

Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.