Sharechat Logo

NZ dollar holds at six-week low as election looms, Europe progress awaited

Monday 21st November 2011

Text too small?

The New Zealand dollar traded at its lowest level since early October a week out from the election and amid reports the European Central Bank is weighing the risks of becoming lender of last resort for the debt-ridden region.

The kiwi dollar was at 75.57 US cents at 9am, from 75.52 cents in late New York trading on Friday. Lack of progress in addressing Europe’s debt crisis has weighed on so-called risk assets including the kiwi dollar. Bloomberg reported the ECB may start talks with the International Monetary Fund about lending funds to the IMF for sovereign bailouts.

Meantime, traders are fretting about a looming Nov. 23 deadline for the US Congress’s deficit-reduction ‘super-committee’ which is aiming to avoid some US$1.2 trillion of automatic spending cuts from 2013.

“It’s the same old story, crouch and hold until we see any news out of the US or Europe,” said Stuart Ive, currency strategist at HiFX.

With New Zealanders set to cast their votes on Nov. 26, opinion polls put the incumbent National Party steady at around 50 percent support and Labour on about half that at 26 percent and the Green Party on about 13 percent. That suggests the main uncertainty would be if National doesn’t get an outright majority and has to form a coalition with a smaller party.

“Offshore investors will continue to position themselves for a variety of outcomes, which may result in further moves lower for the NZD,” said Alex Sinton, a trader at ANZ Bank, in a note.

Data out this week includes electronic card spending at 10:45am today.

HiFX’s Ive said traders want to know whether the Rugby World Cup caused a big jump in spending or had a lagged effect on sales.

The kiwi dollar dropped to 75.65 Australian cents from 75.57 cents on Friday, and declined to 57.99 yen from 58.16 yen. It was little changed at 55.92 euro cents and held steady at 47.85 British pence. The trade weighted index fell to 66.93 from 66.95 on Friday.

  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:

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