Support our sponsors:

NZX 50 Index	4611.96	2.40
S&P/ASX 200	5191.20	0.00
Dow Jones Industrials	14839.80	21.00

Twitter

Facebook

RSS

NZ dollar falls as investors mull Greek bailout

Thursday 23rd February 2012

Text too small?

The New Zealand dollar fell as investors digest the details of a second bail-out package for Greece and uncertainty about Europe’s future dims investor appetite for higher yields.

The New Zealand dollar fell as low as 82.62 US cents from 83.25 cents yesterday at 5pm. It traded at 82.97 cents at 8am in Wellington. The kiwi slipped to 62.62 euro cents from 62.94 cents.

The greenback and the euro have continued to strengthen against the kiwi after European Union finance ministers handed Greece a 130 billion euro lifeline to avoid bankruptcy in March. The package was secured on pledges for greater austerity and a 53.5 percent haircut for private bond investors, removing near-term uncertainty for the Mediterranean nation.

“The market is looking for further news that propels the kiwi either way,” said Dan Bell, currency strategist at HIFX. “I see the kiwi heading back down into the early 80s - we haven’t seen any recent news to move higher. The kiwi is looking stretched.”

Fitch lowered Greece’s credit grade by two levels to C from CCC. Default is “highly likely in the near term” and Fitch will cut the rating to “Restricted Default” once a bond exchange is completed.

European data released overnight showed economic activity in region was weaker than expected, with German manufacturing and services PMI just managing to cling on above 50, while the Eurozone’s PMI slipped to 49.7 from 50.4 previously.

In the US, the world’s largest economy, home sales in January climbed to the highest level since May 2010, according to the National Association of Realtor. Employment and housing data are also set for release today.

There is no significant data set for release in New Zealand today.

The New Zealand dollar fell to 77.91 Australian cents from 78.13 cents. It was little-changed on 66.67 yen from 66.53 yen. The New Zealand dollar rose to 52.95 British pence from 52.71 pence.

The trade-weighted index rose to 73.38 from 73.55.

(BusinessDesk)

BusinessDesk.co.nz

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
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.