NZ dollar climbs vs euro as Greece asks for cash

NZ dollar climbs vs euro as Greece asks for cash, US data improves

By Paul McBeth

April 26 (BusinessWire) – The New Zealand dollar rose to a 26-month high versus the euro as Greece formally requested access to the aid package, easing concern the debt-stricken nation may default on its loans, while stronger U.S. data stoked investors’ appetite for higher yielding, or riskier, assets.

Greek Prime Minister George Papandreou confirmed the Mediterranean nation will look to tap the International Monetary Fund-European Union 45 billion euro aid package, though markets are unconvinced this will be enough to address the country’s debt. Stocks on Wall Street and in Europe gained after data showed orders for durable goods rose 2.8% last month, while new home sales surged 27%. With Australian markets on holiday to commemorate ANZAC Day, local markets are expected to be reasonably quiet today.

“Better U.S. data and Greece formally asking to tap the rescue package improved risk sentiment as Greece staved off default for a little while longer,” said Khoon Goh, senior markets economist at ANZ New Zealand.

The kiwi climbed to 53.73 euro cents from 53.44 cents on Friday in New York, and gained to 71.66 U.S. cents from 71.15 cents. It rose to 66.77 on the trade-weighted index, or TWI, a measure of the currency against a basket of five trading partners, from 66.33 last week, and increased to 77.39 Australian cents from 7.21 cents. It advanced to 67.34 yen from 66.47 yen last week, and was up to 46.60 pence from 46.38 pence.

Goh said the currency may trade between 71.26 U.S. cents and 71.80 cents today as it takes its cue from Asian equity markets. “With Australia on holiday it will be dead quiet and the kiwi will pretty much grind sideways,” he said.

Lurking in traders minds’ this week is the Reserve Bank’s official cash rate review on Thursday. Though Governor Alan Bollard isn’t expected to lift the benchmark interest rate, investors will be watching to see if he gives any indication as to whether he will begin hiking rates in June or push it out to a later date. Markets are betting Bollard will boost the OCR by 158 basis points over the next 12 months, according to the Overnight Interest Swap curve.

(BusinessWire)

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