Sharechat Logo

NZ dollar hits record high vs. euro after leaders approve Spanish bailout

Monday 23rd July 2012

Text too small?

The New Zealand dollar rose to record high versus the euro after policymakers finally approved a 100 billion euro bailout for Spain's banking sector.

The New Zealand dollar rose as a high as 65.98 euro cents, the most since the single currency entered circulation in 2002, from 65.74 cents at the close of trading in New York. It traded at 65.80 cents at 8am. The kiwi declined to 79.70 US cents from 79.93 cents.

Eurozone finance ministers met by conference call on Friday to finally approve an agreement to provide aid to Spain. The move did little to ease concern about Europe's woes, with Spanish Prime Minister Mariano Rajoy forecasting a second year of recession and Valencia becoming the first region to seek a rescue from the nation's central government.

"It is the Spanish news which sent the euro tumbling," said Stuart Ive, currency strategist at HiFX. "Certainly it's not good news but I don't think it will lead to a Spanish sovereign bailout."

"The kiwi and the Aussie are still holding up remarkably well," Ive said. Against the US dollar the kiwi is "still in last week's trading range, it's just at the bottom end of it - I think we will continue in this range."

In a sign that investors still see Spain as high risk, Spanish 10-year government bond yields closed the week up 27 basis points at 7.19 percent on Friday.

Officials from the European Central Bank, International Monetary Fund and European Commission will return to Greece this week to decide whether to release more funds from a 130 billion euro rescue package.

There is no significant data set for release in New Zealand today.

The New Zealand dollar was little changed at 76.90 Australian cents at 8am from 76.93 cents at the close of trading in New York. The kiwi was largely unchanged at 51.03 British pence from 51.13 pence. It dropped to 62.50 yen from 62.71 yen. The trade weighted index was little changed on 72.34 from 72.40.

BusinessDesk.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