Sharechat Logo

NZ dollar inches higher amid Asia, US holidays; Greece outcome awaited

Tuesday 16th February 2010

Text too small?

The New Zealand dollar inched higher, in subdued volumes with market holidays in the US and much of East Asia, as investors await the outcome of the European finance ministers’ meeting which will decide the fate of a bailout package for Greece.  

European Union treasurers are meeting to discuss Greece’s fiscal deficit, and what measures, if any, they will take to bailout the debt-stricken nation. Uncertainty over the package has left investors nervous, sapping demand for the euro, which has slumped 5.1% this year. Speculative investors holding short positions in the euro hit a record high net 57,000 for the week ending February 9, according to Chicago Futures Trading Commission data. A short position is where a trader sells their holding in the expectation they can buy it again at a cheaper price.  

“All currencies are stuck around where they finished on Friday, and the only potential mover is the Euro-zone finance ministers’ meeting taking place about now,” said Imre Speizer, markets strategist at Westpac Banking Corp. “If we get some news on Greece today, I’d expect to see the kiwi roar up in a knee-jerk reaction before coming back down when people drill into the details.” 

The kiwi edged up from 69.66 cents to 69.78 US cents yesterday, and rose to 64.70 on the trade-weighted index, or TWI, from 64.65. It increased from 62.71 yen to 62.75 yen yesterday, and was little changed at 78.47 Australian cents from 78.45 cents.

It gained from 51.24 cents to 51.30 euro cents yesterday, and rose from 44.43 pence to 44.53 pence.  

Speizer said the currency may trade between 69 US cents and 70.20 cents today in a fairly muted fashion until Wall Street opens after its long weekend today.  

The Reserve Bank of Australia releases its minutes from its last meeting, when it kept its benchmark interest rate unchanged at 3.75%, and investors will be looking for any undisclosed reasons as to why Governor Glenn Stevens paused.  

New Zealand and Australia’s monetary policy settings have been diverging over the the past five months after the so-called ‘lucky country’ avoided falling into recession and began hiking rates in October, the first G-20 nation to begin a tightening policy.

The differing fortunes of the trans-Tasman neighbours has seen the New Zealand dollar drop 2.9% against its Australian counterpart this year, and traders expect this cross-rate to remain under pressure.  

 

 

Businesswire.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar gains on G20 preference for growth
NZ dollar dips as Wellington CBD checked for quake damage
NZ dollar gains, bolstered by RBA minutes, strong dairy prices
NZ dollar falls after central bank says it may scale up currency intervention
NZ dollar gains before CPI, helped by dairy gains, rally on Wall Street
NZ dollar trades little changed as US budget talks bear down on deadline
NZ dollar falls with equities on view US to sail over fiscal cliff
NZ dollar weakens as fiscal cliff looms, long bets unwind
NZ dollar sinks to three-week low as equities fall, fiscal talks in focus
NZ dollar slips as fiscal cliff talks grind slower in Washington