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NZ dollar little changed above 83 US cents as debt ceiling eyed

Monday 7th January 2013

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The New Zealand dollar was little changed above 83 US cents as the US debt ceiling remains in focus and with little local data to drive the currency forward.

The New Zealand dollar traded at 83.08 US cents from 83.18 cents in New York on Friday. The trade-weighted index eased to 74.88 from 74.99.

On Saturday, US President Barack Obama said in his weekly video address that there could be "catastrophic" consequences for the global economy if the Congress doesn't agree to lift the US$16.4 trillion debt ceiling, with temporary measures to allow the US to pay its bills due to expire in mid-February. Meanwhile, economic data is relatively favourable, with the US economy adding 155,000 jobs last month while the unemployment rate held at 7.8 percent.

"The fundamentals underpinning the NZD haven't changed; the grinding NZ economic recovery is well placed to continue, NZ commodity prices are trending higher, and the global economy is past the worst," said Mike Jones, strategist at Bank of New Zealand. "As long as these supportive factors remain in play, NZD/USD dips towards 0.8000 will be short-lived in our view."

"In the short-term, we suspect the NZD/USD will continue to trade at the whim of offshore risk appetite and equity market sentiment," he said.

The Standard & Poor's 500 Index rose 0.5 percent to close at 1466.47 on Friday, the highest in five years.

The kiwi dollar traded at 63.52 euro cents from 63.58 cents and was at 51.67 British pence from 51.77 pence. It eased to 79.26 Australian cents from 79.35 cents and traded at 73.22 yen from 73.29 yen.

(BusinessDesk)

BusinessDesk.co.nz



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