Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ dollar holds below 83 US cts on Italian poll uncertainty

NZ dollar holds below 83 US cts as Italian election uncertainty erodes investor confidence

By Paul McBeth

Feb. 27 (BusinessDesk) - The New Zealand dollar held below 83 US cents in local trading as the uncertain election outcome in Italy dented investors' appetite for riskier, or higher-yielding, assets, and trumped an unchanged outlook for this season's payout to dairy farmers.

The kiwi traded at 82.43 US cents at 5pm in Wellington from 82.54 cents at 8am, down from 83.39 cents yesterday. The trade-weighted index fell to 75.49 from 76.28 yesterday.

The prospect of a stalemate after Italy's first general election since the global financial crisis has spooked investors, reigniting fears Europe's fourth biggest economy won't continue a drive for austerity, and that will seep into rest of the region.

Election results in Italy showed Pier Luigi Bersani, who supports the cost cutting programme, won the lower house by less than half a percentage point, while former Prime Minister Silvio Berlusconi secured a blocking vote in the Senate.

"That's going to hang over market sentiment as people fret about whether Italy can potentially be stable or if it's a big risk to Europe," said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney. "It's not going to have a direct impact on the New Zealand dollar, more through the confidence channel."

The downbeat tone overshadowed Fonterra Cooperative Group affirming an expected farm-gate payment of $5.50 per kilogram of milk solids, and government figures showing a slightly bigger trade deficit than predicted last month.

The Fonterra announcement and trade figures "were a bit of a yawnfest with the focus still on Italy," Tennent-Brown said.

Northern Hemisphere investors will continue to look for any clues on whether Italy can make its election result work, or if it will call another election, and watch the second day of testimony by Federal Reserve chairman Ben Bernanke to policymakers in the US.

The kiwi fell to 63.10 euro cents from 63.84 cents yesterday and declined to 54.56 British pence from 54.78 pence. The local currency dropped to 80.62 Australian cents from 81.16 cents and fell to 75.75 yen from 76.83 yen.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half A Billion Accounts: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Half Full: Fonterra Raises Forecast Payout As Global Supply Shrinks

Fonterra Cooperative Group, the dairy processor which will announce annual earnings tomorrow, hiked its forecast payout to farmers by 50 cents per kilogram of milk solids as global supply continues to decline, helping prop up dairy prices. More>>

ALSO:

Results:

Meat Trade: Silver Fern Farms Gets Green Light For Shanghai Maling Deal

The government has given the green light for China's Shanghai Maling Aquarius to acquire half of Silver Fern Farms, New Zealand's biggest meat company, with ministers satisfied it will deliver "substantial and identifiable benefit". More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news