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NZ dollar gives up gains as some traders take profits near 84 US cents

Thursday 3rd January 2013

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The New Zealand dollar, which soared along with stocks on Wall Street and in Europe on the US fiscal cliff deal, gave up some of its gains as traders sold the currency as it neared 84 US cents.

The kiwi dollar recently traded at 83.16 US cents from 83.73 cents in Asian trading yesterday, having reached as high as 83.92 cents overnight. It was at 82.76 cents before news of the deal in Washington came through. The trade-weighted index fell to 74.46 from 74.98.

US Treasuries sold off and equity markets on both sides of the Atlantic rallied on the first day of trading in 2013, buoyed by a US budget agreement that eliminated tax increases and spending cuts that might have tipped the world's biggest economy into recession.

"There's clearly some profit taking kicking in," Richard Franulovich, a senior currency strategist at Westpac Banking Corp in New York. "There's no specific kiwi-negative news."

The kiwi dollar may not fall much further, with "solid demand" from 81.50 US cents, he said.

The local currency hasn't exceeded 84 US cents since Dec. 19. It didn't move much after dairy product prices rose 2 percent in the first GlobalDairyTrade auction of 2013, recovering losses through the tail-end of last year.

The New Zealand dollar slipped to 79.10 Australian cents from 79.87 cents and rose to 72.30 yen from 73.02 yen. It eased to 51.08 British pence from 51.20 pence and was little changed at 63.02 euro cents.

(BusinessDesk)

BusinessDesk.co.nz



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