NZ dollar retreats after RBNZ bank comments

AAP, with a staff reporter

The New Zealand dollar extended its slide when Reserve Bank of New Zealand governor Graeme Wheeler outlined possible responses to a high currency and traders latched onto his use of the word intervention.

The New Zealand dollar fell to 83.53 United States cents from 84.08 US cents at the end of the previous session Wellington.

It was at 84.58 US cents before Mr Wheeler's speech notes were released.

The trade-weighted index was at 76.27 from 76.33.

Mr Wheeler told the New Zealand Manufacturers' and Exporters' Association the kiwi dollar is significantly over-valued, and he "will intervene when the circumstances are right".

That was enough to spark a sell-off in the currency as the word intervention got flashed across trader screens.

"Everyone latched onto certain parts of (Mr Wheeler's) speech regarding intervention," HiFX currency strategist Dan Bell said.

"I think the market has over-reacted. He outlines a number of measures that could be used but this was more of an academic position than a policy position."

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