The New Zealand dollar rose to a new five-month high against the euro on speculation European banks may struggle to strengthen their balance sheets enough to meet criteria for financial aid.
The New Zealand dollar rose to 61.05 euro cents from 60.85 cents yesterday and reached a high of 61.13 cents overnight. The currency fell to 78.13 US cents at 8am from 78.86 cents at 5pm yesterday.
The 17-nation euro weakened against most major currencies as European shares fell, led by Italy’s largest bank, UniCredit which lost 17.3 percent, following a 14.5 decrease a day earlier. The European Banking Authority told four Italian banks they needed to boost their capital and submit their recapitalisation plans to the central bank by the established Jan. 20 deadline.
“Europe is run by fear - fear banks are not getting funding and fear of sovereign debt,” said Stuart Ive, senior currency strategist at HiFX. “We are still yet to see a conclusive way of dealing with the problem.”
France’s borrowing costs rose at a bond sale yesterday as credit-rating companies threatened to cut the nation’s top AAA ranking. It had to pay a higher yield on the 10-year issue, selling 7.96 billion euros of debt at a yield of 3.2 percent, up from 3.18 percent in a sale in early December.
“Bond issue in itself wasn’t that bad, it wasn’t a failure – but it’s another additional thing weakening the euro,” Ive said.
Local data releases resume next week with overseas trade and building consents, followed by the New Zealand Institute of Economic Research’s quarterly survey of business opinion the following week. The first major piece of data will be the fourth-quarter consumer price index on Jan. 19, followed by the Reserve Bank’s official cash rate review on Jan. 26.
In the US, non-farm payrolls and employment rate are scheduled for release today.
The kiwi slipped to 60.26 yen from 60.37 yen yesterday, and fell to 76.04 Australian cents from 76.17 cents. It was little changed at 50.38 pence from 50.41 pence yesterday.
The trade-weighted index was at 69.95 from 70.07.
(BusinessDesk)
No chart with that title exists.
7 Comments
Ponzi Bonds, ∞ TRO, and hyper hopethecation. It's done and dusted. Just need the Greeks to do some creative accounting (once they get the best deal they can) and the crisis will be over. The elites get increased control, the soft money countries export their inflation to the hard money countries, the wealth of 99% gets pillaged, mission accomplished.
I'm sure you'd fit right in goNZ, with all your taxpaying dollars being fed into things you are strongly against. Govts debasing your money, your income, taxing your power, your fuel, not based on facts or prevention, just another money grab. I support you in your war against all things BS.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.