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NZ dollar eases as concerns about Italy rise
NZ dollar eases as concerns about Italy rise
Nov. 8 (BusinessDesk) – The New Zealand dollar pared gains as investors ask if Italy can afford to service its debt as the European sovereign debt saga continues.
The kiwi was at 79.48 U.S. cents at 8am, down from the 79.83 cents overnight high and from 79.54 US cents at 5pm yesterday.
A rise in Italy's 10-year bond yield to 6.67 percent, the highest in 14 years, has investors wondering if Europe's third-largest economy can afford the cost of funding its large debt.
Europe remains the main issue for financial markets. Investors are assessing if Italian Prime Minister Silvio Berlusconi can hold onto power while Greece is working to put in place a government to pass its latest bailout package and France has announced new austerity measures.
"The market is starting to fret about Italy," said Khoon Goh, head of market economics at ANZ New Zealand. "The kiwi is just following on from offshore as there is nothing in the local agenda to cause the market to react."
A National Australia Bank confidence survey in Australia today at around 1.30pm New Zealand time and Australian trade data for September may capture market attention later today.
The kiwi, euro and Australian dollar all rose on Monday after Greece's two main parties reached agreement on forming a new government that will not be led by Prime Minister George Papandreou. The euro is weak and the S&P 500 is down 0.6 percent on concerns about Europe.
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 eased to 76.48 Australian cents at 5pm from 76.59 cents at 5pm yesterday. It was at 57.75 euro cents from 57.77 cents yesterday, and was 49.56 British pence from 49.65 pence.
The kiwi was little changed at 62.03 yen from 62.07 yen at 5pm yesterday and the trade-weighted index eased to 69.53 from 69.61.
(BusinessDesk)
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