NZ dollar holds ground

Wednesday 26th January 2011

The New Zealand dollar held its ground against its Australian counterpart, and the greenback and euro, after having pushed higher against the aussie yesterday afternoon following surprisingly soft consumer inflation data across the Tasman.

At 8am the kiwi was buying A76.99c, US76.58c, and 0.5607 euro, little changed from its levels at 5pm yesterday.

The NZ dollar did push up against the British pound, lifting to 48.38p at 8am from 47.82p at 5pm, after a surprise 0.5 percent contraction in fourth quarter British GDP due to adverse weather, compared with economists' forecasts of a 0.5 percent gain.

ANZ bank said the NZ dollar had a gentle night, and avoided being dragged lower by a weaker Australian dollar.

With a public holiday in Australia today, trading should be light, ANZ said.

Tomorrow had the potential to be action-packed, with the Reserve Bank's review of interest rates at 9am, 45 minutes after a rate decision in the United States.

BNZ currency strategist Mike Jones said the "shockingly weak" British GDP figures had reignited global growth concerns.

Rising risk aversion and the renewed global growth concerns had reduced the appeal of growth-sensitive currencies such as the NZ and Australian dollars, as investors sought out the relative safe havens of the US dollar, swiss franc and yen.

The NZ dollar slipped to 62.78 yen at 8am from 63.10 at 5pm, while the trade weighted index was slightly higher at 68.26 from 68.20.

NZPA

Comments from our readers

No comments yet