NZ dollar gains as equities climb on Greek bank deal, U.S. data
By Jason Krupp
Aug. 30 (BusinessDesk) - The New Zealand dollar rose against the greenback after news of a Greek bank merger and
stronger-than-expected U.S. consumer spending figures spurred investors' appetite for higher-yielding, or riskier,
assets such as equities and growth-linked currencies.
The New Zealand dollar recently traded at 84.58 U.S. cents, up from 84.39 cents yesterday having earlier broken through
the major resistance level in afternoon trade. It was little changed at 71.13 on the trade-weighted index of major
trading partners' currencies from 71.12 previously.
Global stock markets rallied after Greece's Alpha and EFG Bank agreed to merge to create the biggest bank in southeast
Europe. The move soothed frayed nerves from investors concerned about the health of the sector, which has been battered
by the debt crisis and recession. The deal was helped by a capital injection from the Qatar Investment Authority, and
was hailed by the Greece's central bank as a vote of confidence in the country's banking systems and economy.
Investor sentiment was further buoyed after U.S. consumers spending rose 0.8% in July, its fastest pace in five months.
The Standard & Poor's 500 Index rose 2.7% to 1,208.13, and Europe's Stoxx 600 closed 1.2% higher at 228.28.
"The good news out of Europe, coupled with better U.S. data, was just what market wanted to see after the news flow was
universally negative for the past month," said Khoon Goh, head of market economics and strategy at ANZ New Zealand.
"People have started to put cash to work, and so we've seen typical risk-on moves," with the gain in equities giving the
"kiwi and Australian dollars another kick up".
On the crosses, the kiwi recently traded at 79.36 Australian cents, down from 79.58 cents yesterday, and rose to 64.93
Japanese yen from 64.75 yen previously. It gained to 58.20 euro cents from 58.16 cents yesterday, and fell to 51.47
pence from 51.54 pence previously.
Goh said the kiwi may trade between a range of 84.20 U.S. cents and 84.80 cents, with the bias towards the upside,
though moves towards 85 cents will meet with strong resistance.
(BusinessDesk)