Sharechat Logo

NZ dollar pares gains after IMF commits US$430 billion to contain debt-crisis

Monday 23rd April 2012

Text too small?

The New Zealand dollar pared offshore trading gains at the open of local trading as investors digested news the International Monetary Fund will commit US$430 billion in fresh money to protect the world economy against Europe’s ongoing debt crisis.

The New Zealand dollar fell to 81.73 US cents at 8am from 81.87 cents at the close of trading in New York on Friday, although it remains above its 81.30 cents local close on Friday at 5pm. The trade weighted index fell to 72.85 from 72.82.

Finance ministers of the Group of 20 nations have been at their annual meeting with the World Bank and IMF in Washington DC, discussing ways to get on top of Europe’s woes. Though the latest IMF offer is sizeable, it wouldn’t be enough to bailout indebted Mediterranean nations Spain and Italy, said managing director Christine Lagarde, who had hoped to secure up to $600 billion.

“We are still on thin ice really,” said Stuart Ive, currency strategist at HiFX. “People will be taking the news on board and saying what does this mean?”

“We may see the kiwi go to 81.40 cents but the strong support will hold at 81.20,” he said.

French President Nicolas Sarkozy will progress to the second round of presidential elections, despite trailing in early exit polls. Socialist party candidate Francois Hollande won between 29 percent and 29.3 percent of the vote, according to early projections by Bloomberg. The candidates will square off again in two weeks.

“The market is cautions about Hollande - it is generally perceived he will not be such an aggressive defender of the euro,” Ive said. “There is a little trepidation in the market.”

China will release its manufacturing PMI today. There is no significant data scheduled for release in New Zealand. A review of local monetary policy settings on Thursday is expected to yield no change.

The New Zealand dollar fell to 78.77 Australian cents from 78.79 cents at the close of trading in New York. The kiwi slid to 66.63 yen from 66.76 yen. It was little changed on 61.98 euro cents from 61.9 cents and 50.77 British pence from 50.70 pence.


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
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:

PCT - Delivering on strategy underpins strong operating result
KFL - August 2020 monthly update
BRM - August 2020 monthly update
MLN - August 2020 monthly update
Further COVID-19 Restrictions at SkyCity’s New Zealand Properties
FY20 results guidance met, Results date, Banking Facility
Sky sells OSB assets to NEP NZ, secures 10 year partnership
NZX fully operational - announcement re COVID-19
Heartland Market Update
Steel & Tube Fy20 Trading Update

IRG See IRG research reports