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NZD/USD is now trading at the lowest level since the beginning of April, extending its falls after two rating agencies downgraded its credit rating in a time span of a few hours.

While the moves are relatively slow, the pair also lost important support and is now vulnerable to more losses. Update.

Both S&P, which downgraded the US, and Fitch both cut the rating this country, reducing the pool of perfectly rated sovereigns. Only according to Moody’s New Zealand remains AAA.

The two downgrades follow the two earthquakes that hit Christchurch in the past year or so, but more significantly reflect the global slowdown. New Zealand relies on exports to Asia. The recent warnings about a “hard landing” for the economic giant also weigh on New Zealand.

NZD/USD lost the 0.7655 line and is now at 0.7634. 0.7655 turns into resistance, followed by 0.7764. Support is now at 0.7550, followed by 0.7430.

For more on the kiwi, see the NZD/USD forecast.

The kiwi got some support from end of month / quarter flows which had to rebalance the falls in stocks and in the US dollar. This will end quite soon and can open the door for further falls.

This is a big time of correction.  

Note that the relatively slow moves of the kiwi mean that it could slide further.