New Zealand’s dollar fell to a four-week low after Moody’s Investors Service said it considered stripping the nation of the top credit rating.
The Australian dollar touched its weakest since Oct. 14 as the extra yield the nation’s bonds offer over U.S. counterparts shrank to the narrowest this month. The Aussie declined this week against most major peers that came after Reserve Bank Governor Glenn Stevens said the currency is likely to be “materially lower” in the future.
“If Moody’s did cut New Zealand’s AAA rating it would be in line with the other two agencies, so you might see a little bit of weakness in the kiwi dollar but it shouldn’t be a huge surprise to the market,” said Emma Lawson, the Sydney-based senior currency strategist at National Australia Bank Ltd.
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