NZ dollar fluctuates against greenback
The New Zealand dollar had another fluctuating night against the greenback and by the local open was about halfway between the overnight range of US74.25c to US73.70c.Overall high-yielding currencies rallied, reversing losses from the prior session, as in
The New Zealand dollar had another fluctuating night against the greenback and by the local open was about halfway between the overnight range of US74.25c to US73.70c.
Overall high-yielding currencies rallied, reversing losses from the prior session, as investors concluded China's unexpected monetary tightening would not derail the world's third largest economy.
Commodity-linked currencies such as the Australian and NZ dollars recovered some losses but the market remained nervous that the withdrawal of liquidity may prompt unwinding of positions in riskier assets as economies recover and central banks focus on inflation risks.
"Commodity currencies are on a much better footing today, but what happened in China is a reminder that they are vulnerable," said Omer Esiner, senior market analyst at Travelex Global Business Payments in Washington.
Around 8am the kiwi was at US73.92c, slightly down from US74.04c at 5pm yesterday, but still in touch with its highest level in more than eight weeks around US74.35c reached on Tuesday.
The NZ dollar slipped to 0.5096 euro at the local open from 0.5114 at 5pm, while it edged up to 67.53 yen from 67.39.
Against the Australian dollar, the kiwi eased to A80.10c at 8am from A80.22c at 5pm, while the trade weighted index dropped to 66.75 from 66.92.
BNZ Capital strategist Mike Jones said modest gains in global equity markets kept risk appetite on a solid footing overnight, underpinning growth-sensitive currencies such as the NZ dollar, and limiting demand for the US dollar and yen.
Currency markets had struggled a bit for direction last night, partly because investors were pondering how quickly relative growth prospects would take over from risk appetite as the key driver of currencies.
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