NZ dollar edges up as risk appetite returns

NZ dollar edges up as risk appetite returns

By Jason Krupp

March 22 (BusinessDesk) - The New Zealand dollar rose against the greenback, as investor appetite for higher yielding, or riskier assets returned amid signs Japan was making progress in cooling its near-critical nuclear reactors.

Japanese authorities that they were making progress in addressing radiation issues at the Fukushima nuclear power plant. Sentiment was further bolstered after Warren Buffet, chairman of Berkshire Hathaway, told Bloomberg he won't sell his Japanese holdings as the earthquake created a "buying opportunity".

"Risk appetites are stronger again on signs that things are starting to normalise somewhat, although we are not out of the woods yet," said Imre Speizer, markets strategist at Westpac Banking Corp.

The kiwi rose to 73.43 U.S. cents from 73.33 cents yesterday, and fell to 64.36 on the trade-weighted basis from 64.39. It fell to 73.03 Australian cents from 73.13 cents yesterday, and rose to 59.55 yen from 59.32 yen. It dropped to 51.62 euro cents from 51.77 cents yesterday, and gained to 45 pence from 44.21 pence previously.

The euro drew buying support amid media speculation that EU ministers at their summit this week will agree to fund a new 500 billion euro permanent rescue mechanism that will be put in place from 2013. The new mechanism, reportedly called the European Stability Mechanism, would offer better interest rates than the existing European Financial Stability Facility.

Oil prices ease slightly, with ICE Brent crude futures last at US$115.03 a barrel from US115.74 yesterday, as U.N.-led forces continued to launch airstrikes against government forces in Libya.

Speizer said the New Zealand dollar is likely to trade between 73 U.S. cents and 73.60 cents, with “strong top-side resistance” as the kiwi approached the 74 cent level.

(BusinessDesk)

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