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NZ Dollar Little Changed After Bollard Comment

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, June 17 NZPA - The New Zealand dollar held around US63c in mixed trading today as investors globally continued to debate the speed and timing of an economic recovery.

The NZ dollar dipped briefly after Reserve Bank Governor Alan Bollard said "if markets are buying the New Zealand dollar on the expectation of a strong recovery they may end up being disappointed".

The comment was seen as an attempt to talk down the NZ dollar but it didn't work for long.

By 5pm the NZ dollar was buying US63.05c from US63.13c at 8am. It climbed from a low point around US62.40c early yesterday afternoon.

"To be honest there is no New Zealand data until the end of next week so external factors are driving things," said Murray Hindley, chief foreign exchange dealer at ANZ Institutional Bank.

US equities were weak on Tuesday as investors fretted at a lack of evidence of an economic recovery many of them have been anticipating.

The doubts are eroding demand for risky currencies but swings in sentiment make for choppy trading.

The US dollar came under pressure on Tuesday night local time after comments from Russia suggesting a need for a global reserve currency other than the greenback, but the idea of the US dollar losing its status is being hit down by a range of commentators.

BNZ Capital senior strategist Danica Hampton said that along with the generally weaker US dollar helped underpin the NZ dollar.

Some commentaries also mentioned that Asian sovereign accounts showed an appetite for the NZ and Australian dollars overnight.

But the greenback recovered after the joint communique from a BRIC (Brazil, Russia, India and China) summit did not bag the US dollar, Ms Hampton said.

The NZ dollar was unchanged at 0.4546 euro from yesterday, and was at 60.88 yen from 60.71.

Against the aussie, the NZ dollar climbed to its highest level in a fortnight around A79.70c yesterday evening then eased away to A79.52c at today's local close.

The trade weighted index was 59.95 at 5pm from 59.82 at 5pm yesterday.

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