NZ dollar recovers from early dip lower
The kiwi's dip in early trading was short-lived as it went on to recover much of the ground it lost.
The New Zealand dollar dipped in early trading today but went on to recover much of the ground it lost.
The euro has been a mover in currency markets lately but local events this week to provide a focus include a Fonterra milk auction, consumers price index and retail sales data as well as confidence surveys and a report on the housing market.
The NZ dollar was at 76.82USc at 5pm, up from 76.69USc at 8am but still down from the 77.02USc at 5pm on Friday.
A move by China to raise lenders' required reserves by 50 basis points on Friday has created concern that Asian economies may not be as strong as expected, causing mixed trading in regional equity markets.
Westpac also expects the US dollar to be weak this week, arguing that this will underpin the NZ dollar, with the possibility of a test of 78USc.
The US dollar is again mired by talk of the US losing its triple-A credit rating because of rising national debt.
"The [US] dollar is on a continued weakening bias, correcting from an overbought top," said Douglas Borthwick, a managing director for trading at Faros Trading LLC, a forex execution firm in Stamford, Connecticut.
The euro has been buoyed by successful bond auctions in Spain and Portugal last week and the market is eyeing meetings of European officials this week for news.
The NZ dollar was at €0.5760 at 5pm from €0.5729 euro at 8am, having hit its lowest level in more than a week around €0.5710 on Friday night.
The NZ dollar reached a six-week high against the Australian currency around 77.85Ac today and was 77.80Ac by 5pm. Concerns about the impact of the floods and the impact of Chinese policy moves on the Australian economy affected sentiment for Australian assets.
"Any Chinese rate rise or tightening of the Reserve Rate Ratio is a pseudo rate hike for the Australian economy," IG Markets said.
The NZ dollar's trade weighted index was little changed at 69.15 at 5pm today from 69.19 on Friday.
NZPA
Mon, 17 Jan 2011
Mon, 17 Jan 2011
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NZ dollar recovers from early dip lower
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