Sharechat Logo

NZ dollar falls almost 1 US cent as markets await details of EU summit

Friday 29th June 2012

Text too small?

The New Zealand dollar fell almost one cent against the greenback as markets await details from the European Union summit in Brussels, which is expected to provide fresh clues of how leaders plan to address the region's growing debt crisis.

The New Zealand dollar fell to 78.72 US cents just before 8am from 79.49 cents yesterday at 5pm. The trade weighted index decreased to 71.61 from 72.05.

The two-day summit is focused on helping Spain and Italy whose borrowing costs continued to soar, with leaders under pressure to stop the crisis spreading. Policymakers are discussing a plan for economic integration within the region. The blueprint suggests common banking supervision and deposit insurance and a “criteria-based and phased” move toward joint debt issuance. It also imposes upper limits on budgets and debt levels of nations that use the euro.

"The kiwi crashed back down to earth last night as investors remained focused on the summit - it undermined risk sentiment over the last 24 hours" said Mike Jones, market strategist at Bank of New Zealand.

German Chancellor Angela Merkel has rejected calls to investigate joint debt or do more to cut Spanish and Italian borrowing costs. Instead she remains focused on creating measures to boost economic growth.

Merkel's mood wasn't helped by data showing Germany's jobless rate climbed more than expected in June, rising for the fourth month in a row. Another indicator that Europe's largest economic engine is starting to slow.

The kiwi fell to 63.24 euro cents from 63.52 cents overnight.

In the world's largest economy, the US, gross domestic product rose at a 1.9 percent annual rate in the first quarter, the Commerce Department said. The pace of expansion, unchanged from a prior reading, was well below the 3 percent increase in the fourth quarter. Motor vehicle output accounted for more than half of this quarter's advance.

The Reserve Bank of New Zealand's monetary and credit aggregates and Building consents for May from Statistics New Zealand are set for release today.

The New Zealand dollar fell to 78.41 Australian cents at 8am from 78.57 cents at 5pm yesterday. The kiwi decreased to 50.79 British pence from 50.99 pence. It increased to 62.56 yen from 63.15 yen.

  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

IRG See IRG research reports