NZ dollar holds near record levels

Photo / File
Photo / File

The New Zealand dollar held near a 5-month high against the greenback and near a record versus the euro following better-than-expected US jobs data and concerns Greece's political leaders will fail to reach the conditions of a 130 billion euro bailout.

The New Zealand dollar traded at 83.33 US cents up from 83.15 cents yesterday. The kiwi dollar rose as high as 63.77 euro cents, the second-highest level since the currency entered circulation in 2002. It traded at 63.46 shortly after 8.30 am.

Sentiment has deteriorated in Europe, with private creditors and Greek's politicians yet to agree on bailout terms. Meetings have been postponed another day, irking lenders and prompting German leader Angela Merkel to demand that Greece's leaders fall into line.

If Greece defaults, "there would be a risk off scenario with the kiwi coming under pressure initially," said Stuart Ive, currency strategist at HiFX. "Time is running out - with Greece stalling for another 24 hours."

"Greek politicians could agree to the deal but they still have to go home and tell the people and that is where the issue lies," Ive said.

Greek woes overshadowed Friday's confidence-building US data, continuing to take investors by surprise. American employers added 243,000 jobs in January, the most in nine months, and the unemployment rate fell to 8.3 per cent from 8.5 per cent in December, according to Labor Department data.

Investors will watch Federal Reserve Chairman Ben Bernanke's testimony on the economy to the Senate Budget Committee on Tuesday for fresh clues to his thinking on the world's biggest economy. He'll also speak on Friday at the 2012 National Association of Homebuilders International Builders' Show on "Housing Markets in Transition."

In Australia, the Reserve Bank is expected to cut interest rates at a meeting today.

In New Zealand, Quarterly Employment Survey figures are set for release today, followed by the household labour force survey on Thursday.

The New Zealand dollar traded at 77.65 Australian cents up from 77.45 cents yesterday at 5pm. The kiwi was little changed on 52.66 British pence from 52.65 pence and at 63.77 yen.

The trade-weighted index advanced to 73.13 from 73.06.

- BusinessDesk

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