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NZ dollar rally runs out of puff
NZ dollar rally runs out of puff
By Paul McBeth
Oct. 5 (BusinessDesk) – The New Zealand dollar’s rally slowed in local afternoon trading after rising in the morning following a report that European officials are looking for a concerted approach to deal with the region’s debt problems.
The kiwi climbed to 76.03 U.S. cents at 5pm, from 74.90 cents at 8am, and was up from 75.30 cents yesterday.
The pace of the kiwi dollar’s rally slowed in late trading during the New Zealand session as stock markets in Asia Pacific were mixed, following the late surge on Wall Street and in Europe after a Financial Times article reported European Economic and Monetary Affairs Commissioner Olli Rehn as saying “there is an increasingly shared view that we need a concerted, co-ordinated approach in Europe.”
That helped bolster investor confidence, which has been lagging in the past couple of days, as markets remain downbeat on the prospect a debt crisis in Europe may lead to a global slowdown, or worse, a second global financial crisis.
“It needs really big money to sort this thing out, even something like a leveraged bail-out fund has me sceptical,” said Imre Speizer, market strategist at Westpac Banking Corp. “Over the next few days we’ll probably see a bounce up in the kiwi to 77 U.S. cents to 79 cents.”
The European Central Bank’s meeting on Thursday will be the next major focus point for investors, though Speizer said Europe’s woes will probably drag on for a long time, and he expects the currency will fall back towards 71 U.S. cents over the coming weeks.
Speizer says New Zealand’s economic momentum has slowed down through the tail-end of the year, though no-one is trading on local fundamentals due to the ongoing problems in Europe.
The kiwi was little changed at 79.67 Australian cents from 79.44 cents yesterday. It rose to 58.281 yen from 57.72 yen yesterday, and gained to 57.20 euro cents and 57.06 cents yesterday.
It rose to 68.34 on the trade-weighted index from 67.93 yesterday. The kiwi dollar rose to 49.25 British pence and 48.80 pence yesterday.
(BusinessDesk)
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