Dollar Declines Against Pound, N.Z. Dollar on Company Earnings

By Lukanyo Mnyanda

Oct. 21 (Bloomberg) -- The dollar fell against the pound and the New Zealand dollar as signs companies are shaking off the worst effects of the recession sapped demand for the U.S. currency as a refuge.

The Dollar Index slid to the lowest level in 14 months as Cadbury Plc increased its sales forecast and Tele2 AB posted profit that beat analysts’ estimates. The dollar dropped the most against its New Zealand counterpart among its 16 most- traded peers after Reserve Bank of New Zealand Governor Alan Bollard said a stronger so-called kiwi wasn’t an obstacle to raising interest rates.

“It’s part of the bigger risk-appetite picture,” said Stuart Bennett, a senior currency strategist in London at Calyon, the investment-banking unit of Credit Agricole SA. “We’re still in an environment where there’s going to be a gradual recovery. For currency markets, it’s all about risk.”

The dollar was $1.6527 against the pound as of 9:34 a.m. in London, from $1.6382 yesterday in New York. The New Zealand dollar climbed to 75.67 U.S. cents, the highest level since July 2008, from 74.96 cents. The U.S. currency was little changed at 90.74 yen, from 90.78 yen. The euro traded at $1.4948, from $1.4945.

“Bollard’s comments have led to more intense speculation about when RBNZ will start hiking rates, and have opened the way for more currency gains,” said Sonja Marten, a currency strategist in Frankfurt at DZ Bank AG.

To contact the reporter on this story: Lukanyo Mnyanda in London at lmnyanda@bloomberg.net