NZ dollar rises as euro-fears ebb

By Hannah Lynch

Feb. 24 (BusinessDesk) – The New Zealand dollar rose within its recent trading range against the greenback and euro as German business confidence added to relief in the wake of Greece’s bailout deal.

The New Zealand dollar rose to 83.72 US cents at 5pm in Wellington from 83.23 cents at 8am. The kiwi rose to 62.61 euro cents from 62.44 cents. The trade-weighted index advanced to 73.66 from 73.39.

Businesses in Germany, Europe’s largest economy, are optimistic, according to the Munich-based Ifo institute. Its business climate index rose to 109.6 in February 108.3 in January, the fourth straight gain. Traders are now waiting for the European Central Bank's second tranche of three-year loans next week. The ECB lends banks as much money as they ask for against eligible collateral.

“Until we get any sort of negative news events, perhaps out of Europe, it is difficult to see any catalyst for the kiwi,” said Nick Tredt, corporate FX dealer at HiFX. “There is a little bit of resistance - the kiwi is topping out at 83.85 US cents.”

“The New Zealand dollar has been heading in a straight line higher since mid December with most of February characterised by range-bound action,” Tredt said.

The kiwi was little changed on 77.97 Australian cents, from 77.87 cents at 8pm this morning amid a leadership battle between Labor leader Prime Minister Julia Gillard and former foreign minister Kevin Rudd, who aims to challenge Gillard for the role in a ballot on Monday.

In the UK, factory orders rose to a six-month high in February to minus 3 from minus 16 in January, the Confederation of British Industry said in a report. The regions gross domestic product for the fourth quarter is set for release tonight with economists in a Bloomberg survey predicting the economy to have shrunk 0.2 percent.

Greece's parliament will meet to endorse a bond swap for private holders of its debt as it moves towards cutting its liabilities by 100 billion euros. The swap starts on Friday.

The New Zealand dollar rose to 53.17 British pence from 52.98 and 67.21 yen 66.69 yen.

(BusinessDesk)

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