Kiwi holds near recent lows as Cyprus fears sap risk appetite

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The New Zealand dollar held near its recent lows after a eurozone bailout plan for Cyprus that includes clipping the island's bank deposits, stoking concern the same demand could occur in nearby nations and spark a run on banks.

The kiwi traded at 82.27 US cents from 82.29 cents at the start of the day and down from 82.72 cents in late New York trading on Friday. The trade-weighted index was at 75.71, from 75.64 earlier in the day and down from 75.85 on Friday.

Traders are pondering the prospects for the effects of the 10 billion euro Cyprus bailout plan spreading to countries such as Spain and Italy as consumers fret their deposits are not safe any longer, which could drive up bond yields.

The Cyprus announcement brought the focus back on to Europe, which is still struggling to find common ground on the region's debt crisis.

"What we're seeing is a general risk-off move, including the New Zealand dollar, which gapped significantly lower at the open following the update from Cyprus," says Stan Shamu, a market analyst at IG Markets.

"In the event Europe's news gets worse in the next few weeks, risk in general will struggle and people will rush back to the US dollar and the yen."

Cyprus's financial strength has been eroded by exposure to neighbouring Greece, and among measures proposed in Brussels is for the nation's savers to forfeit 9.9 percent of their deposits.

Waning risk appetite spread through the Asia Pacific, with most major equity indexes falling.

The kiwi rose to 63.76 euro cents from 63.25 cents on Friday and fell to 54.47 British pence from 54.73 pence. It traded little changed at 79.41 Australian cents and sank to 77.92 yen from 78.80 yen.

(BusinessDesk)


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NZ Market Snapshot

Forex

Sym Price Change
USD 0.7564 -0.0024 -0.32%
AUD 0.9702 0.0013 0.13%
EUR 0.6994 0.0022 0.32%
GBP 0.5086 -0.0025 -0.49%
HKD 5.8646 -0.0195 -0.33%
JPY 90.2830 -0.1540 -0.17%

Commods

Commodity Price Change Time
Gold Index 1204.8 9.420 2015-03-26T00:
Oil Brent 59.2 0.230 2015-03-26T00:
Oil Nymex 51.4 2.240 2015-03-26T00:
Silver Index 17.1 0.140 2015-03-26T00:

Indices

Symbol Open High Last %
NZX 50 5833.2 5854.2 5833.2 0.36%
NASDAQ 4835.7 4889.2 4876.5 -0.27%
DAX 11920.2 11954.1 11843.7 -0.07%
DJI 17716.3 17759.5 17718.5 -0.23%
FTSE 6895.3 6910.6 6895.3 -0.32%
HKSE 24541.4 24549.9 24497.1 -0.04%
NI225 19374.7 19590.0 19471.1 -0.95%