NZ dollar little changed as traders fret about US fiscal cliff, Australian capex looms
By Paul McBeth
Nov. 28 (BusinessDesk) - The New Zealand dollar was little changed in local trading as investors worry about US legislators' ability to prevent US$607 billion of tax hikes and spending cuts from kicking in next year, and ahead of Australian capital expenditure figures tomorrow.
The kiwi rose to 82.14 US cents at 5pm in Wellington form 81.95 cents at 8.30am and down from 82.25 cents yesterday. The kiwi increased to 78.56 Australian cents from 78.48 cents yesterday.
Stocks across Asia, with Japan's Nikkei 225 index down 0.8 percent, Hong Kong's Hang Seng index falling 0.9 percent and China's SSE Composite declining 0.7 percent as traders remain nervous about the strength of the US economy. Investors are mulling the consequences of talks in the US between the White House and House of Representatives on how to avert the so-called fiscal cliff which would plunge the world's biggest economy back into recession.
"Markets are looking at the fiscal cliff, which is just five weeks away now," said Alex Hill, currency strategist at HiFX in Auckland. For the kiwi to break out of its 80.50 US cents to 83.50 cents range, "we'll need to see something quite significant."
Markets shifted their focus back to the US after European policymakers agreed yesterday to a sweeter deal for Greece's 130 billion euro bail-out. The kiwi rose to 63.50 euro cents from 63.36 cents yesterday.
Traders will be looking for Australian capital expenditure figures tomorrow, which are expected to show the world’s 12th biggest economy might be starting to slow down after the resources boom gave it a buffer during the global financial crisis.
Australian business investment rose 2 percent in the three months ended Sept. 30 after growing 3.4 percent in the previous quarter, according to a Bloomberg survey of economists.
The currency was almost unchanged at 51.30 British pence from 51.29 pence yesterday, and fell to 67.22 yen from 67.44 yen. The trade-weighted index was little changed at 73.46 from 73.50 yesterday.