NZ dollar pares gains as European focus shifts to Italy

NZ dollar pares gains as European focus shifts to Italy

Nov. 7 (BusinessDesk) – The New Zealand dollar gave up gains during the session to finish on a weak note heading into an overnight session where concerns about Europe are turning to Italy.

The kiwi was at 79.54 US cents at 5pm from 79.15 US cents at 8am, which was down from 79.28 cents at 5pm on Friday. It had traded as high as 79.78 cents during the session.

“It is down on its lows as is the euro and Aussie dollar,” said Tim Kelleher, head of institution FX sales at ASB. “The focus has gone off Greece and onto Italy, in my view.”

Kelleher said Italy had more debt that Greece and as its bond yields got higher the debt became harder to fund, and the market was looking heavy going into the European session.

The kiwi, euro and Australian dollar all rose this morning after Greece's two main parties reached agreement on forming a new government that will not be led by Prime Minister George Papandreou. The development was viewed as a positive one, and it increased investor's appetite for riskier currencies.

Robert Rennie, Westpac Banking's chief currency strategist in Sydney, said Greece in particular and Europe in general will again be the focus of traders this week.

There is also economic data in China, including the Consumer Price Index, this week as well as a Bank of England rate decision and Australian employment data but the statistics diary is light in New Zealand.

The kiwi may trade between 77.80 cents and 80.72 cents this week, according to a poll of five analysts by BusinessDesk.

The kiwi rose to 76.59 Australian cents at 5pm from 76.34 Australian cents at 8am and 76.44 cents on Friday. It was at 57.77 euro cents from 57.42 cents last week, and was 49.65 British pence from 49.50 pence on Friday.

The kiwi gained to 62.07 yen from 61.86 yen at 8am and 61.82 yen on Friday.

The trade-weighted index rose to 69.61 from 69.45 at 8am and 69.32 on Friday.

(BusinessDesk)

© Scoop Media