Kiwi falls away from 10-week high against greenback

Thursday 3rd February 2011

The New Zealand dollar fell away against the greenback to below US78c early today, after reaching its highest level in 10 weeks against the US currency.

By 8am the kiwi was at US77.83c, down from US78.16c at 5pm yesterday, and after having peaked around US78.30c about 11.30pm. The NZ dollar edged up to 0.5651 euro at 8am from 0.5642, and lifted to A77.35c against the Australian dollar from A77.14c at 5pm.

Reuters said the euro retreated from a 2-1/2-month high against the US dollar, having climbed as high as US$1.3861, after a German government official said Berlin opposed allowing a euro zone rescue fund to buy troubled countries' debt.

Traders said winter storms in the Midwest and Northeast were keeping trading ranks thin, while clashes in Egypt between supporters and opponents of President Hosni Mubarak injected some uncertainty into markets.

But the US dollar and Swiss franc, usual beneficiaries of safe-haven buying, were only modestly bid.

ANZ bank said the NZ dollar had been trapped within a tight range, as climate and political events overseas dominated headlines.

Resistance for the NZ dollar at US78.25c was likely to remain in place as the markets waited for the release of December quarter jobs data at 10.45am, with indications it would show a fall in employment in this country and a rise in the unemployment rate, ANZ said.

Meanwhile, the Australian dollar had been weakened by the crossing of the Australian coastline overnight of Cyclone Yasi.

The trade weighted index slipped to 68.92 at 8am from 68.99 at 5pm, while the NZ dollar was little changed at 63.60 yen.

NZPA

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