New Zealand Dollars Weakens as Pig Flu Spreads

The New Zealand dollar, followed by its Australian counterpart, fell for the second day on fears that the swine flu may deepen the global slump, affecting tourism and high-yielding assets.
After  U. S. Regulators told that the Bank of America and the Citigroup are likely to need more capital in the short-term future, the Australian dollar fell below 70 cents for the first time in a week. The New Zealand dollar had its sharpest fall in a 7-day period against the yen, the greenback and the Swiss franc, a fall that was highly pushed by students who have been in Mexico to be confirmed with the swine flu infection. Both the Aussie and the kiwi had an optimistic previous week of gains based on brighter economic data, but since this Monday, Chinese negative numbers and the pig flu were more than enough for traders to sell their assets in Oceania.
As the concerns regarding the swine flu increase, it is understandable that traders will run for cover, selling assets in high-yielding markets such as the Australian, according to economists. The Wall Street Journal article informing that major banking institutions are likely to need more capital also contributed in a negative way to put the Australian and the New Zealand markets on their knees.
In Asia the NZD/JPY fell from 54.75 to 53.72 while the AUD/JPY weakened from 69.07 to 67.53. A similar trend occurred against the greenback, being the NZD/USD traded yesterday at 0.5655 to 0.5570 today and the AUD/USD fell from 0.7131 to 0.7023.

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