NZ dollar gives up gains as traders take profits
The New Zealand dollar, which soared along with stocks on Wall Street and in Europe on the US fiscal cliff deal, gave up some of its gains as traders sold the currency as it neared 84USc.
The kiwi dollar recently traded at 83.16USc from 83.73 cents in Asian trading yesterday, having reached as high as 83.92USc overnight. It was at 82.76USc before news of the deal in Washington came through. The trade-weighted index fell to 74.46 from 74.98.
US Treasuries sold off and equity markets on both sides of the Atlantic rallied on the first day of trading in 2013, buoyed by a US budget agreement that eliminated tax increases and spending cuts that might have tipped the world's biggest economy into recession.
"There's clearly some profit taking kicking in," says Richard Franulovich, a senior currency strategist at Westpac in New York. "There's no specific kiwi-negative news."
The kiwi dollar may not fall much further, with "solid demand" from 81.50USc, he adds.
The local currency hasn't exceeded 84USc since December 19. It didn't move much after dairy product prices rose 2% in the first GlobalDairyTrade auction of 2013, recovering losses through the tail-end of last year.
The New Zealand dollar slipped to 79.10Ac from 79.87Ac and rose to ¥72.30 from ¥73.02.
The kiwi eased to 51.08p from 51.20p and was little changed at €0.6302.