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Forex - NZD/USD hits 2-week low amid increased risk aversion

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Forexpros - The New Zealand dollar fell to a two-week low against its U.S. counterpart on Wednesday, as concerns that global economic growth is losing momentum combined with worries over sovereign debt issues boosted safe haven inflows.

NZD/USD hit 0.8577 during late Asian trade, the pair's lowest since July 21; the pair subsequently consolidated at 0.8611, shedding 0.60%.

The pair was likely to find support at 0.8525, the low of July 20 and resistance at 0.8782, Tuesday's high.

The outlook for global growth remained downbeat after data on Tuesday showed that U.S. consumer spending dropped in June for the first time in nearly two years and incomes barely rose.

Meanwhile, the risk of a U.S. sovereign debt downgrade lingered, despite the passage through the Senate of a bill to raise the country's debt ceiling by at least USD2.1 trillion, averting a U.S. default.

Following passage of the bill, Fitch Ratings said the debt deal was "a step in the right direction," but warned the government still had more work to do to maintain its triple A credit rating.

The kiwi was also lower against its Australian cousin, with AUD/NZD rising 0.26% to hit 1.2470.

Later in the day, payroll processing firm ADP was publish a report on U.S. non-farm payrolls, while the U.S. Institute of Supply Management was to publish data on service sector growth.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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