Sharechat Logo

NZ dollar rises as EU summit expectations, US optimism dim

Wednesday 27th June 2012 1 Comment

Text too small?

The New Zealand dollar rose amid concerns the European Union summit on Thursday will fail to deliver a concrete solution to the regions debt crisis and as weaker-than-expected data boosted demand for high yielding currencies, such as the kiwi.

The New Zealand dollar traded at 79.20 US cents just before 8am up from 78.85 cents at 5pm yesterday. The trade weighted index increased to 71.87 from 71.64.

Markets are focused on the EU's two-day summit in Brussels on Thursday to see if any decisive steps will be taken towards solving the euro-zone's debt crisis. It will be the first summit since Greece's parliamentary elections on June 17 that saw victories for pro-bailout parties. French and Italy are urging Chancellor Angela Merkel to take conclusive steps to end the crisis, now in its third year.

"The local currencies, the kiwi and the Aussie, performed relatively well overnight, deferring any news out of Europe until we get past the meeting at the end of the week," said Stuart Ive, currency strategist at HiFX. Figures showing American consumers have become less optimistic also helped lift the kiwi, he said.

In the US, consumer confidence fell to a five-month low as mounting concern over jobs and incomes dimmed the outlook for spending. The Conference Board’s sentiment index fell to 62 from a revised 64.4 in May.

A separate report showed that home prices in the US were stabilising, with prices rising for a third straight month in April.

It's a data heavy week in the US, with durable goods orders released on Wednesday and gross domestic product and jobless claims out on Thursday.

New Zealand’s second-largest export market, China has a slew of data out at the end of week, with the leading index and business sentiment and purchasing managers’ index. The HSBC preliminary purchases manager index gave a reading of 48.1 in June, indicating that Chinese manufacturing could shrink for an eighth consecutive month, amid reports that Chinese coal demand has also been easing.

New Zealand's merchandise trade will be released by Statistics New Zealand later this morning.

The New Zealand dollar was little changed on 78.60 Australian cents from78.64 cents at 5pm. It was largely unchanged on 50.55 British pence from 50.60 pence. The kiwi increased to 63.31 euro cents from 63.05 cents and increased to 62.87 yen from 62.69 yen.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

On 27 June 2012 at 9:56 am jai chand said:
Just yesterday you wrote that the NZ$ will fall due to European crisis Quote"the New Zealand dollar may fall from near a seven-week high as concern mounts that Thursday's European leaders' summit in Brussels will fail to deliver a durable solution to the region's debt crisis. In today's news article it rose. Quote Wednesday 27th June 2012 The New Zealand dollar rose amid concerns the European Union summit on Thursday will fail to deliver a concrete solution to the regions debt crisis and as weaker-than-expected data boosted demand for high yielding currencies, such as the kiwi. How are we to believe your articles which is so contradictory?
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