NZ dollar drops vs. euro after Greek upgrade, Spanish debt sale

The New Zealand dollar fell against the euro as the common currency climbed against most of its trading peers after Standard & Poor's upgraded Greece and Spain managed to sell all the debt it targeted in its last auction of the year.

The kiwi dollar fell to 63.62 euro cents from 64.07 cents at 5pm yesterday in Wellington. The local currency fell to 84.15 US cents from 84.42 cents.

The euro gained to a seven-month high against the greenback after S&P lifted its credit rating on Greece to B- from selective default with a stable outlook. Meantime, Spain drew solid demand in its latest debt auctions, selling three-month bills at an average yield of 1.195 percent, down from 1.254% at a previous auction on Nov. 27.

"It's been a good night for the euro" on the back of the Greek upgrade, said Tim Kelleher, head of institutional FX sales at ASB Institutional. "The kiwi has been struggling in the past couple of days, with a bit of profit taking on the crosses. It had probably gone too far, too fast."

The New Zealand dollar may trade in a range of 83.90 US cents to 84.30 cents today, he said.

Traders are awaiting balance of payments figures for the third quarter later this morning, which are expected to show New Zealand's current account deficit widened to $4.83 billion in the three months ended Sept. 30 from $1.8 billion in the second quarter, according to a Reuters survey. The annual deficit narrowed to $9.83 billion, or 4.8% of GDP, from $10.1 billion, or 4.9%.

Tonight, traders will be looking at the release of Germany's IFO survey for more evidence of the strength of Europe's biggest economy.

The trade-weighted index slipped to 75 from 75.26. The kiwi fell to 51.79 British pence from 52.05 pence. It fell to 79.91 Australian cents from 80.02 cents and slipped to 70.85 yen from 70.93 yen.

(BusinessDesk)

BusinessDesk
Wed, 11 Jul 2018

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NZ dollar drops vs. euro after Greek upgrade, Spanish debt sale