NZ dollar dips and holds following English’s bearish comments
by Paul McBeth
Feb. 10 (BusinessDesk) – The New Zealand dollar was little changed against the greenback overnight after taking a knock
yesterday on Finance Minister Bill English’s bearish outlook on the economy.
The kiwi fell about 0.4% after English yesterday said New Zealand may have fallen into a so-called ‘double-dip’
recession in the second half of last year and expressed concern at the knock to Australian economic activity from a
summer of natural disasters.
Investors will be looking at Australia’s January employment data today to see the early impacts of tropical storms,
flooding and bushfires, and are expecting the nation added 15,000 jobs last month according to Bloomberg.
Chinese export and import figures for last month will also be closely watched after the People’s Bank of China hiked its
lending rate a quarter-point to 6.01% yesterday in a bid to stave off inflationary pressures.
“Those comments from English were enough to see the New Zealand dollar underperform and keep it off the highs from
earlier in the week,” said Mike Jones, strategist at Bank of New Zealand.
“Both pieces of today’s data will provide important updates on whether buoyant Asian growth is being sustained,” he
said. This would give the kiwi its direction.
The local currency was little changed at 77.19 U.S. cents from 77.18 cents yesterday, and recently traded at 68.47 on
the trade-weighted index of major trading partners’ currencies from 68.53.
It was unchanged at 63.57 yen and rose to 76.27 Australian cents from 76.11 cents yesterday. It fell to 56.24 euro cents
from 56.55 cents yesterday, and declined to 47.88 pence from 48.04 pence.
Jones said the currency may trade between 76.80 U.S. cents and 77.50 cents today.
Stocks in Europe and on Wall Street dipped as investors digested U.S. Federal Reserve chairman Ben Bernanke’s testimony
to Congress, where he reiterated America’s unemployment rate is still too high in spite of the improving economy.
Bundesbank President Axel Weber will not stand for another term at the German bank, Bloombeg reported, raising
speculation he’s fallen out of favour to succeed Jean-Claude Trichet as head of the European Central Bank.
(BusinessDesk) 09:21:55