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Hot Topic NBR Focus: GMO
Hot Topic NBR Focus: GMO
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NZ dollar has bumpy ride

The New Zealand dollar traded in a bumpy US1 cent range overnight as Europe captured market attention.The kiwi was worth US70.99c at 5pm yesterday, rose to as high as US71.36c overnight before falling to a low of US70.35c and recovering be worth US70.63c

NZPA
Fri, 29 Jan 2010

The New Zealand dollar traded in a bumpy US1 cent range overnight as Europe captured market attention.

The kiwi was worth US70.99c at 5pm yesterday, rose to as high as US71.36c overnight before falling to a low of US70.35c and recovering be worth US70.63c at 8am today.

Westpac currency strategist Imre Speizer said European credit-related woes dominated market news last night, hurting risk markets in Europe and the US.

"In new twists to the Greek story, Le Monde reported that France and Germany were considering a bailout, which was later refuted by those governments, the IMF said it was ready to help, and the Greek PM denied they approached China for funds, as well as blaming the blowout in bond yields on speculators."

Moody's also said Portugal was at risk of a ratings downgrade and Standard&Poors said the UK's banking system was no longer among the world's most stable.

That saw investors ditch the kiwi for safe-haven currencies like US dollar and Japanese yen.

Overnight the New Zealand dollar was generally steady against the Aussie, worth A78.87c this morning from A78.73c yesterday. It was also steady against the British pound, worth 43.78 pence, from 43.76p yesterday.

The kiwi was worth 0.5053 euro this morning, from 0.5062 yesterday.

The NZ dollar also rose against the Japanese yen before falling back to 63.46 at 8am from 64.11 yesterday.

The trade weighted index dropped to 64.73 from yesterday 64.97.

There is local data out today, including the December trade balance figures and building consents. Reserve Bank Governor Alan Bollard will also address the Canterbury Chamber of Commerce today after he left the OCR at its record low rate of 2.5 percent yesterday.

Despite local data, the NZD would look to offshore moves for direction, ANZ senior currency strategist Khoon Goh said.

"Further spikes higher will continue to be met with strategic selling interests to ensure they are unsustainable at this point."

Meanwhile, the US dollar rose on Thursday to its highest level in more than six months against the euro, as persistent concerns over the fiscal health in some smaller euro zone countries weighed on the single currency.

In midday trading, the euro was 0.3 percent lower at $1.3976. Earlier, it fell as low as $1.3938, its weakest since mid-July, according to Reuters data.

Traders were watching for a weekly close under $1.3980 to open fresh downside potential.

Against the yen, the dollar fell 0.3 percent to 89.73 yen as sharp losses on Wall Street prompted investors to close riskier trades financed by cheap borrowing in the yen. The euro dropped 0.6 percent to 125.42 yen after hitting a nine-month low of 125.07 yen.

NZPA
Fri, 29 Jan 2010
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NZ dollar has bumpy ride
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