Sunday, 22 July 2012

Spanish bailout fears sap kiwi

          JASON KRUPP  Last updated 08:31 23/07/2012

The New Zealand dollar opened lower against the greenback after Spain's Valencia region called on the government to help pay its debts, igniting fears the country may need a full-scale bailout.

The kiwi recently traded at US79.73 cents, down from US80.18 at 5pm on Friday, while on the Trade Weighted Index of major trading partners' currencies, it was little changed at 72.44 from 72.48.
The euro dominated currency movements in the New York session on Friday, dropping broadly on the Valencia announcement.
Adding to the downward momentum was news Spain had cut its growth forecasts for 2012 and 2013, with the figures suggesting Europe's fourth biggest economy will remain mired in recession for at least the next 12 months.
The news took the froth off Wall Street, with the Standard & Poor's 500 Index falling 1 per cent to 1362.66, although the exchange still rose on a weekly comparison.
"It's possible last week's mini-rallies have ended so a cautious stance is warranted today," said Imre Speizer, a market strategist at Westpac.
The kiwi is likely to trade off macroeconomic trends today with little in the way of local or global data to distract.
Across the Tasman, producer price inflation figures for the second quarter are due, while in Europe consumer confidence stats for July are schedule for release after the close of the Asian trading day.
On the crosses, the New Zealand dollar recently traded at 76.88 Australian cents, down from A77.04c at 5pm on Friday, and it fell to 62.52 yen from 63.05 yen.
The kiwi rose to 65.79 euro cents from 65.39 euro cents, and was little changed at 51.08 pence from 51.04 pence.
Speizer said the currency could push high on the day, as traders reassess moves in the euro, but the US79.80c level would have to hold first.