Friday 26th February 2010 |
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The New Zealand dollar fell as renewed concerns about Greece’s fiscal health and weaker US data eroded investors’ appetite for risk.
Both Standard & Poor’s and Moody’s Investors Service warned that Greece’s credit rating may be cut again as soon as March while Spain came under more scrutiny as another looming threat to the Eurozone. In the US, stocks fell as figures showed jobless claims rose for a second week, while durable goods orders, excluding transport items such as aircraft, unexpectedly fell. Global jitters that rattled currency markets have overshadowed more upbeat indications in the domestic economy, including a survey yesterday showing business confidence has jumped to a 10-year high.
“Sharply lower risk appetite and continued nervousness about the global recovery have taken a toll on the NZD over the past 24 hours,” said Mike Jones, currency strategist at Bank of New Zealand.
Bank of NZ’s risk appetite index has declined to 55%, from about 60% at the start of the week.
The kiwi dollar bought 69.09 US cents, from 69.50 cents 24 hours ago. It weakened to 61.55 yen from 62.50. The kiwi was recently at 51 euro cents from 51.07 cents late yesterday. The trade-weighted index was at 64.20 from 64.05.
Data out today includes merchandise trade for January, which is expected to show the deficit widened to $100 million last month from $2 million. The government statistician is also due to release building consents for January.
“In the absence of a major surprise, direction for the NZD is expected to remain subject to gyrations in risk appetite and offshore equity market sentiment,” Jones said.
Businesswire.co.nz
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