Kiwi eases after Greek funding lull

JASON KRUPP
Last updated 09:02 28/11/2012

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The New Zealand dollar has eased lower against the greenback as investors struggle to find a clear trading direction after eurozone officials yesterday said they would release the next tranche of Greek bailout funding.

The kiwi recently traded at US82.05 cents, down from US82.25c at 5pm yesterday, while on the Trade Weighted Index of major trading partners’ currencies it was little changed at 73.47 from 73.50.

Global equity markets finished the overnight trading session in a mixed position, with relief from the Greek bailout announcement showing little follow through momentum, although currency markets were a less muted affair as trader sold out of the euro.

The kiwi cross opened at 63.46 euro cents, up from 63.36 yesterday, although the real blood was shed versus with US currency, with the euro falling to a month low against the greenback.

A deeper fall in sentiment was stemmed by solid US data, with durable goods, consumer confidence, and the Richmond manufacturing survey all showing signs of improvement.

“The Greek deal was very much a case of buy the rumour and sell the fact,” said Mike Jones, a market strategist at BNZ. “The sharp sell off in the euro dragged the kiwi lower but the US data helped it scrape off the low of US82c.”

The parliamentary review of the Reserve Bank’s annual report will attract attention today from currency markets today, as traders look for further insights into how newly appointed governor Graeme Wheeler is likely to steer monetary policy.

Investors will also be waiting for construction figures out of Australia and the US, as well as the release of the Federal Reserve’s Beige Book, however Jones said the real focus this week will be New Zealand business confidence numbers which are due tomorrow.

On the crosses, the New Zealand dollar opened at 78.78 Australian cents, on par with where it was trading at 5pm yesterday, it rose to 67.51 yen from 67.44 yen, and fell to 51.20 pence from 51.29p.

Jones said the kiwi is expected to trade between US82c and US82.55c on the day, with the bias tipped to the upside.

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- © Fairfax NZ News

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