Greek woes keep Kiwi down

MARIA SLADE
Last updated 18:13 09/05/2012

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The New Zealand dollar fell against the greenback today as renewed Greek default fears continued to suppress global risk appetites.

The kiwi recently traded at US78.46c, down from US78.73c this morning. On the trade weighted index against major trading partners' currencies the kiwi was at 70.50.

Direct FX currency advisor Sam Coxhead said while the dollar had been under continued pressure against the greenback, it had a better day on the Australian cross.

An announcement by the Reserve Bank this morning had caused analysts to pare back expectations around interest rate cuts.

"The market had got very much ahead of itself it seemed, and was surprisingly pricing as much as 80 per cent chance of a cut of 25 points at the next meeting", Coxhead said.

However, the kiwi was likely to be dragged further down against the greenback amidst concerns that Greek leaders would back out of bailout agreements.

On the crosses, the kiwi was recently trading at 78.00 Australian cents, up from A77.81c this morning. It fell to 62.57 Japanese yen from 62.88 yen in the morning.

It was at 48.63 pence, down from 48.73 pence in the morning, and was little changed at 60.50 euro cents from 60.53 euro cents earlier.

Coxhead said further consolidation around the key technical level of US78.50c could open the way for the kiwi to drop another rung.

He expected the kiwi to trade in a broad range between US77.90c and US79.20 overnight.

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- BusinessDay.co.nz

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