NZ dollar little changed after Draghi comments, Kim Jong II's death

Tuesday 20th December 2011

The New Zealand dollar was little changed after European Central Bank President Mario Draghi ruled out more spending on the region’s debt and the death of North Korean dictator Kim Jong II sparked concern over security on the Korean peninsula.

The kiwi dollar rose to 75.82 US cents just after 8am, from 75.73 cents at 5pm yesterday.

President Draghi reiterated that the ECB founding treaty prevents it from increasing government-bond purchases to fight the region’s debt crisis. European finance ministers are trying to negotiate channeling 200 billion euros in additional funding through the International Monetary Fund. The kiwi weakened after Kim’s death and reports of missile test firings. His son Kim Jong-un is tipped to succeed him.

“The kiwi is expected to continue to trade heavily – there aren’t a lot of positives to hang your hat on,” said Richard Franulovich, a senior currency strategist at Westpac Banking Corp. in New York.

In New Zealand, traders are looking ahead to the balance of payments report for the third quarter due out tomorrow and gross domestic product on Thursday.

The market is expecting GDP rose 0.6 percent in the third quarter after eking out a gain of just 0.1 percent three months earlier, according to a Reuters survey of 14 economists.

Across the Tasman, the Reserve Bank of Australia will release the minutes from its Dec 6 meeting providing direction for interest rates and this evening the German IFO business survey and UK consumer confidence data are released.

The kiwi dollar rose slightly to 76.41 Australian cents from 76.38 yesterday at 5pm and 59.09 yen from 59.06 yen. It remained relatively unchanged at 48.94 British Pence from 48.91 pence and 58.3 euro cents from 58.27 cents.

The trade-weighted index was up to 68.19 from 68.12.

(BusinessDesk)

BusinessDesk.co.nz

Comments from our readers

No comments yet