NZD/USD Falls Sharply Below 0.7750 as RBNZ Sells Currency

New Zealand’s currency dropped to its lowest in a year after the central bank said its sales of the currency in August were the most in seven years. The dollar headed for its biggest monthly gain since 2012 against peers.

The kiwi dropped against all 31 major counterparts as Prime Minister John Key was reported saying the currency needs to be weaker. The Aussie dollar slid to levels last seen in January. The euro fell to its lowest in 22 months versus the greenback before the European Central Bank meets Oct. 2.

“We are interpreting this as intervention,” Sam Tuck, a senior currency strategist at ANZ Bank New Zealand Ltd. in Auckland, said of today’s currency sales data. The kiwi “is likely to remain under pressure while people digest this, but I don’t think that today’s data should really surprise the market. The RBNZ has been very clear about this.”

Bloomberg

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