Article – BusinessDesk
Jan. 31 (BusinessDesk) – The New Zealand dollar rose in local trading on renewed speculation Greece will reach a debt-swap agreement with bondholders stoking investors’ appetite for riskier, or higher-yielding assets, just as a dimming fiscal outlook …
NZ dollar rises as Greek talks ‘back on track’, investor confidence improves
By Hannah Lynch
Jan. 31 (BusinessDesk) – The New Zealand dollar rose in local trading on renewed speculation Greece will reach a debt-swap agreement with bondholders stoking investors’ appetite for riskier, or higher-yielding assets, just as a dimming fiscal outlook in Portugal opens a new front in the regions debt-crisis.
The New Zealand dollar rose to 82.30 US cents at 5pm, from 81.96 cents just after 8.30am, and 82.10 cents yesterday.
Investor sentiment improved after European Union leaders met in Brussels for the 16th time in two years since Greece’s fiscal emergency provoked the regions debt-crisis. Leaders agreed on a deficit-reduction treaty that will speed up sanctions on violators and require balance-budget provisions at a national level, Bloomberg reported. Talks over Greece’s debt restructuring package continue with leaders signaling they are closer to reaching an agreement.
“I will reserve judgment until we see what the US market does tonight, but the kiwi uptrend remains intact,” said Imre Speizer, market strategist at Westpac Banking. “If the New Zealand dollar breaks 82.50 US cents we will see it going significantly higher, even though it is remains overbought.”
Fresh doubts about Portugal’s economic health offset the improved sentiment after concerns the EU would break a promise not to restructure the nation’s debt pushed the yield on its 10-year bonds up 2.17 percentage points to 17.39 percent, according to Bloomberg.
“It might not necessarily be that Portugal becomes the main story in town, but it has been in focus lately,” Speizer said.
Tomorrow traders will be looking for China’s January PMI manufacturing data due for release.
Fonterra Cooperative Group’s GlobalDairyTrade Auction is will take place on Tuesday in the US, with results expected to remain at an average winning price of around US $3,700 a tonne, according to ANZ New Zealand economists.
The New Zealand dollar fell to 62.41 euro cents, down from 62.68 cents yesterday, and was little changed at 52.30 pence from 52.24 pence. It slipped to 77.36 Australian cents from 77.43 cents yesterday, and advanced to 62.75 yen from 62.25 yen.
The trade-weighted index was little changed 72.26 from 72.21 yesterday.