Kiwi holds against euro, gains against Aussie

Tuesday 11th January 2011

The New Zealand dollar lost ground against the greenback during a volatile session, but outperformed the softer Australian dollar and held up against the euro.

The kiwi failed to break fresh ground against the euro, which found some respite overnight, but remained near five-year highs. By 5pm, the kiwi was at 0.5860, down from 0.5901 at the same time yesterday.

The kiwi first broke the significant level of 0.5800 against the euro in late December, and has made large gains against the European currency since then.

"It's clearly broken above that and looking for all money like it will keep nudging higher, until the eurozone gets all fixed up," Westpac senior market strategist Imre Speizer said.

The kiwi was a touch weaker against the US dollar, at US75.86c from US76.13c yesterday, but rose to A77.01c against the Australian dollar, from A76.44c.

The kiwi fell slightly against the yen and sterling, and the trade weighted index eased to 68.99 from 69.14.

"During our session, it was all about the Aussie floods - the Aussie dollar's getting quite severely sold," he said.

The aussie fell more than US1c today, and as the already devastating floods looked like they were intensifying, investors were evaluating the impacts on the Australian economy.

The euro recovered some losses against the greenback after the European Central Bank provided some support to Greece, Portugal and Ireland.

However, concerns about indebted euro zone countries and talk Portugal will need a bailout persisted.

NZPA

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