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NZ dollar dips after three-week high against greenback


The New Zealand dollar pushed to its highest level in nearly three weeks against the greenback before going into a sharp decline.

NZPA
Thu, 20 Jan 2011

The New Zealand dollar pushed to its highest level in nearly three weeks against the greenback before going into a sharp decline.

By 8am the kiwi was down to US77.23c from US77.41c at 5pm yesterday, and after climbing to around US77.85c early today.

BNZ currency strategist Mike Jones said that in the early part of the night, indications that solid Chinese demand was being maintained without rampant inflation had seen strong commodity prices and global equities, under-pinning growth sensitive currencies such as the NZ and Australian dollars.

But later global stock markets reversed course, indicative of a cooling in risk appetite, following a terrible profit announcement from investment banking and securities firm Goldman Sachs and a weak set of United States housing numbers.

A bout of selling of the NZ dollar against the euro also weighed on the kiwi's level against the US dollar, as a recent spate of good European news continued overnight, with 2011 German economic growth forecasts being revised up.

ANZ said that news of in-the-money options due to expire tomorrow had seen the NZ dollar sold across the board.

The NZ dollar was down from A77.13c at 5pm to A76.96c at 8am, having fallen to its lowest level in almost a week around A76.80c a little earlier, and the kiwi also dropped to 0.5722 euro at 8am from 0.5755.

ANZ said the NZ dollar had initially looked well supported at A77c, but a late sell-off in the NZ dollar and demand for the aussie, helped by rising gold prices, had taken the kiwi lower.

Asian sovereign-related buying had helped keep the euro in demand and outperforming the kiwi, ANZ said.

New Zealand inflation data today and retail sales tomorrow would remain the focus for the market in this country.

Reuters said the euro hit an eight-week high against the US dollar on growing hopes euro zone officials will navigate the sovereign debt crisis, with further gains seen if key levels are sustained.

The NZ dollar also fell to 63.20 yen at 8am from 63.70 at 5pm, while the trade weighted index fell to 68.87 from 69.20.

NZPA
Thu, 20 Jan 2011
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NZ dollar dips after three-week high against greenback
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