Kiwi steady amid dented risk sentiment

RICHARD MEADOWS
Last updated 09:08 24/01/2013

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The New Zealand dollar failed to push through key levels of resistance overnight after a slightly downgraded IMF forecast cast a pallor over global risk sentiment.

The kiwi recently traded at US84.18c, little changed from US84.20 at 5pm yesterday, while on the Trade Weighted Index of major trading partners' currencies it was unchanged at 75.50.

Westpac market strategist Imre Speizer said the US84.40c mark had become an obstacle, with several instances of strong selling from traders.

"I think if it can break above that, it will move to US84.75c," he said.

Overnight the International Monetary Fund downgraded its global growth forecast for 2013 and 2014 by 0.1 percentage points in each year.

"It was only a slight downgrade, so nothing to get too carried away with, but it put a cap on risk sentiment," Speizer said.

Markets also gave a lukewarm response to news that the US House of Representatives had voted to suspend the debt ceiling for another four months, buying enough time for a budget plan to be put into effect.

Speizer said manufacturing data due from China was expected to keep ticking higher and should lend some strength to the kiwi.

On the crosses, the kiwi recently traded at 79.79 Australian cents, up from A79.72c at 5pm yesterday, and 74.57 yen, from 74.37 yes yesterday. It was trading at 63.22 euro cents, up from 63.09 euro cents, and 53.15 pence, up from 53.07p earlier.

Speizer said the kiwi would likely continue to find support at US83.80c and resistance coming in at US84.40c today.

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- BusinessDay.co.nz

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