Kiwi makes comeback against euro

Monday 21st February 2011

The New Zealand dollar made a comeback today against the euro after falling in early trading.

At 8am, the kiwi fell to 0.5555 against the euro, which was boosted broadly by increased expectations that the European Central Bank would raise interest rates, but managed to climb up to 0.5582 by the end of trading.

The NZ dollar was also buying US76.35c after reaching a one-week high of around US76.50c on Saturday morning, and slipping to US76.20c at 8am today.

The greenback, a traditional safe-haven along with the Swiss franc, failed to capitalise on heightened geopolitical tensions in the Middle East.

Anti-government protesters rallied in Tripoli's streets at the weekend, tribal leaders spoke out against leader Muammar Gaddafi and army units defected to the opposition as oil exporter Libya endured a bloody revolt.

BNZ currency strategist Mike Jones said the NZ dollar against the greenback continued to be torn between the positive impact of strong and rising global commodity prices, and the negative impact of near-term weakness in domestic data.

Meanwhile, a survey of New Zealand's services sector showed a decline in January to a six-month low, with the employment subindex contracting to its lowest level in 17 months.

The kiwi edged up to A75.41c from A75.23c at 8am today, holding above the seven-week low around A74.85c touched on Friday morning.

The NZ dollar was also buying 63.44 yen from 63.29 at 8am, while the trade weighted index edged up to 67.79 from 67.59.

NZPA

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