Kiwi edges up as Cyprus deal may be watered down, RBA looms
"The Cyprus situation is another example of why NZ should have a bank deposit insurance scheme."Featured comment
The New Zealand dollar edged higher against the greenback after Cyprus delayed a vote on its EU bailout amid talk the proposal may be watered down.
The kiwi rose to 82.48 US cents from 82.33 cents at 5pm in Wellington yesterday. The trade-weighted index rose to 75.86 from 75.75.
Cypriot ministers are seeking to revise the plan that would impose a levy on bank deposits as part of a 10 billion euro bailout, Reuters reported. Stocks and risk currencies were sold off yesterday amid fears other debt-laden euro nations could be dragged into the malaise, with a run on banks, after Cyprus closed its lenders.
Traders are also looking ahead to the release of minutes of the Reserve Bank of Australia's last meeting for clues to any further rate cuts.
"Markets were able to take some comfort overnight from a delay and watering down of the 'bail in' proposal," says Mike Jones, strategist at Bank of New Zealand.
The kiwi fell to 79.32 Australian cents from 79.49 cents ahead of the RBA minutes and speeches by Guy Debelle, the RBA's assistant governor (financial markets), and deputy governor Philip Lowe.
"Should the tone of the minutes support the notion the RBA has finished easing, NZD/AUD will remain under the pump, and could test support towards 0.7900," Mr Jones says in his morning note.
The New Zealand dollar fell to 63.69 euro cents from 63.76 cents and gained to 54.62 British pence from 54.51 pence. It rose to 78.71 yen from 77.96 yen.