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NZ dollar jumps nearly $US1c against the greenback


The New Zealand dollar jumped nearly a cent in value on the exchange rate against the greenback in the early hours of today, but then traded in a narrow range for most of the session.

NZPA
Wed, 29 Jun 2011

The New Zealand dollar jumped nearly a cent in value on the exchange rate against the greenback in the early hours of today, but then traded in a narrow range for most of the session.

At 5pm, it was at US81.28c, near its high for the day, after rising from US80.25c just after midnight to US81.23 seven hours later, buoyed by positive sentiment as investors bet legislators in Greece would approve an austerity package needed to avert a debt default.

It was US80.44c at 5pm yesterday -- well down on a 26-year peak of $0.8301 on June 6 -- and is regarded as trapped in a range of US80c-US82c. 
 In advance of a vote in Athens on austerity measures -- seen as the necessary precursor to international financial aid for the troubled Greek economy -- exchange rate for the euro slipped as investors hesitated to buy it further.

The market was wary about the long-term outlook for the euro zone's debt problems, and investors unwilling to buy it further until the saw the Greek parliament accept the austerity package, Reuters reported.

European Central Bank President Jean-Claude Trichet made comments which markets interpreted as signalling a July interest rate hike. This helped to shore up the common currency, but investor caution meant the euro shied away from $US1.4400 yesterday, near the 55-day moving average level, to trade at $US1.4371 at 5pm, up from $US1.4296 the previous day.

Greece's plan was largely expected to be passed by its parliament, but the long term outlook for its debt problem would remain unclear, and analysts said they did not see much room for the euro to rise further.

Locally, New Zealand markets expect building and business confidence surveys to be released tomorrow.

Today the NZ dollar fell from 0.5627 euro yesterday to its lowest level in nearly three weeks around 0.5590 early today before strengthening to 0.5656 at 5pm. It lifted to 65.90 yen at 5pm from 65.01 yesterday, and was slightly higher at A77.06c from A76.94 yesterday. The trade weighted index lifted to 70.38 at 5pm from 69.86 yesterday.   

NZPA
Wed, 29 Jun 2011
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NZ dollar jumps nearly $US1c against the greenback
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