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NZ dollar little changed after 6.5-magnitude quake

NZ dollar little changed after 6.5-magnitude quake sends capital into a spin

By Paul McBeth

July 22 (BusinessDesk) - The New Zealand dollar was little changed after a 6.5-magnitude earthquake in the Cook Strait shut down parts of the capital city as authorities assessed the damage which was ultimately found to be largely superficial.

The kiwi traded at 79.32 US cents at 5pm in Wellington from 79.02 cents at 8am and 79.29 cents on Friday in New York. The trade-weighted index slipped to 75.08 from 75.25 last week.

Wellington will re-open for business tomorrow with public transport back to normal and employers told they can resume trading provided their buildings are up to scratch. Portions of the city were shut and Wellington financial trading desks closed due to the quakes. Investors have heightened concerns about earthquakes in New Zealand after the country’s second-biggest city, Christchurch, was levelled by a series of temblors in 2010 and 2011.

“The market hasn’t reacted negatively to the earthquake,” said Michael Johnston, senior trader at HiFX in Auckland. “If we see a bit more damage, we’ll probably see the kiwi come off a little.”

Johnston said the local currency may squeeze a little higher this week, with 79.50 US cents a good opportunity to sell on rallies, before resuming its downward trend.

The kiwi fell to 79.33 yen at 5pm in Wellington from 79.80 yen last week after Japanese Prime Minister Shinzo Abe’s upper house election victory.

It dropped to 85.99 Australian cents from 86.36 cents on Friday, with the Australian currency stronger following the Bank of China move to drop the floor on borrowing costs that had been set at 30 percent below its benchmark rate.

The local currency was little changed at 60.30 euro cents from 60.27 cents last week and 51.88 British pence from 51.90 pence.

(BusinessDesk)

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