Sharechat Logo

NZ dollar falls to 2-week low vs. greenback, gains vs. euro on Europe's crisis

Wednesday 14th December 2011

Text too small?

The New Zealand dollar fell to a two-week low against the greenback and gained versus the euro after Moody’s Investors Service lowered the outlook on nations on the periphery of Europe, suggesting last weekend’s summit hasn’t allayed debt fears.

The kiwi fell to 76.11 US cents at 8am, from 76.36 cents at 5pm. It dropped to a low of 76.11 cents overnight. The kiwi climbed to 58.19 euro cents, the highest in a week, from 57.85 cents yesterday.

The euro sank to an 11-month low against the US dollar amid speculation last weekend’s summit of EU leader has failed to placate the credit rating companies.

Moody’s lowered the outlook on debt ratings for Bulgaria, the Czech Republic, Latvia and Lithuania to stable from positive. It also placed eight Spanish banks on review for a possible downgrade. Separately, Fitch Ratings cut Italy's largest insurer, Assicurazioni Generali, to A- from AA- overnight.

“The twists and turns in the European debt crisis continue,” said Mike Burrowes, currency strategist at Bank of New Zealand. “Overnight, the markets continued to worry that the latest EU plan will be insufficient to stem the crisis.”

The New Zealand dollar weakened against the greenback after the Federal Reserve reiterated its intention to keep interest rates in the world’s biggest economy near zero through until mid-2013. Reserve Bank of Australia deputy governor Ric Battellino will speak in Sydney at 4.30pm New Zealand time.

The New Zealand dollar has been mostly on a downward path against its Australian counterpart since mid-August and is currently trading at 75.64 cents, down from 80.77 cents in September.

“The kiwi is on the downward range” against the Australian dollar, said Stuart Ive, currency strategist at HiFX. “If Battellino talks about policy then that will have a bearing on the kiwi dollar,” he said.

The kiwi was at 59.33 yen from 59.45 yen yesterday. It rose to 49.05 British pence from 48.92 pence. The trade-weighted index increased to 68.17 from 68.11.

  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