NZ dollar hovers below 62 euro cts; Greece enters third day of talks

By Hannah Lynch

Jan. 20 (BusinessDesk) – The New Zealand dollar continued to trade below 62 euro cents after speculation the euro could be in the early stages of stabilising as Greece heads into its third day of debt talks.

The New Zealand dollar traded at 61.83 euro cents at 5pm, down from 62.01 cents just before 8.30 this morning. The kiwi was at 80.13 US cents, down from 80.23 cents.

The euro strengthened against the kiwi as Greek Prime Minister Lucas Papademos prepares to enter his third day of talks with private creditors in an attempt to lower the nation’s debt levels. Papademos is racing to secure a deal to finance a package for the cash-strapped country before a March 20 bond repayment of 14.5 billion euros.

“The euro has responded more to the positive news of late than the negative news – but it will only be a matter of time before we get more negative news,” said Chris Tennent-Brown, FX economist at the Commonwealth Bank of Australia.

Tennent-Brown expects the New Zealand dollar to trade within the same range ahead of the Reserve Bank of New Zealand review of monetary policy next week, after the Consumer Price Index dropped an unexpected 0.3 percent in the three months to Dec. 31 yesterday. The official cash rate is widely expected to signal no change at 2.5 percent.

“Not too much has changed since the December monetary policy statement,” said Tennet-Brown. “The kiwi has been very steady and very quiet since the CPI data - reinforcing the RBNZ has time to wait on the sidelines.”

The New Zealand dollar was little changed on 77.04 Australian cents, from 77.07 cents. It fell to 61.8 yen from 61.91 yen and 51.76 British Pence from 51.82 pence.

The trade-weighted index was down to 71.26 from 71.35.

(BusinessDesk)

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