NZ dollar falls as ECB halts loans to Greek banks   17 May 2012

Hannah Lynch

The New Zealand dollar fell to a five-month low after the European Central Bank said it will temporarily stop lending to Greece's banks, damping investors' appetite for risk-sensitive assets.

The New Zealand dollar fell as low as 76.20 US cents in Northern Hemisphere trading from 76.48 cents yesterday. It traded at 76.30 cents just before 8am. The trade weighted index slipped to 69.33 from 69.47.

Investor nerves remained fragile after Europe's central bank said it will put a temporary hold on lending to some Greek banks to limit its risk in response to the Mediterranean nation's inability to elect a government. ECB President Mario Draghi signalled the bank won't compromise on its key principals just to keep Greece in the euro, and acknowledged for the first time that Greece could leave the euro. The bank has no new plans for policy action and is instead waiting to see the outcome of the next election.

"You have to be cautious of these kinds of headlines because they are still just making the market jump," said Rebecca Orlowitz, analyst at Commonwealth Bank of Australia in New York. "The kiwi has just slowed back down - we expected 78.60 US cents to cap the topside but I think we are looking to go below 76.20 cents before we see some buyers."

Greece’s three main political parties have been unable to reach an agreement since elections on May 6. The nation will probably return to the ballot box on June 17. This date is yet to be confirmed.

"Until we see these elections it kind of just a call for 'what's your view?'" Orlowitz said.

US Federal Reserve policy makers said extra stimulus may be needed to help boost the world's largest economy if growth slows or there is elevated risk, according to the minutes from the Federal Open Market Committee's April meeting.

Earlier this year the Fed reaffirmed its pledge to keep interest rates near zero until at least the end of 2014.

Investors will be eyeing the sale of French and Spanish government bonds on Thursday to see if the region's debt crisis is continuing to worsen. It will be the first French auction since Francois Hollande defeated Nicolas Sarkozy as president.

In New Zealand, ANZ Job Advertisements for April and March's Producer Price Index from Statistics New Zealand will be released today.

The New Zealand dollar fell to 60.06 euro cents from 60.21 cents yesterday and declined to 77.04 Australian cents from 77.23 cents. The kiwi was little changed at 47.89 British pence from 47.94 pence yesterday and was largely unchanged at 61.27 yen from 60.21 yen.

(BusinessDesk)

Add a comment

Bookmark and Share

News

NZ provides further aid to Iraq

28 Aug 2014 News
New Zealand Government NZ provides further aid to Iraq Foreign Minister Murray McCully today announced that New Zealand will provide ... more

Excellence and impact for top quality research

28 Aug 2014 News
University of Auckland Excellence and impact for top quality research *Interviews:This was a University of Auckland seminar, but the... more

Business

Christchurch property investor wins policy appeal in Supreme Court

27 Aug 2014 Business News
Article - BusinessDesk   Christchurch property investor Ridgecrest wins IAG policy appeal in Supreme Court By Jonathan ... more

Time to rethink India's IT reputation, delegation says

26 Aug 2014 Business News By Pattrick Smellie
Article - BusinessDesk   Time to rethink India's IT reputation, says visiting delegation Aug. 26 (BusinessDesk) - India's... more

Living

Entries open The Hobbit Fan Fellowship Contest

26 Aug 2014 Lifestyle
Air New Zealand Air New Zealand invites Hobbit fans to enter The Hobbit Fan Fellowship Contest for a chance to win a ... more

MTV VMAs 2014: Lorde wins Best Rock Video over actual rock bands

25 Aug 2014 Environment
Singer Lorde shows off her Moonman trophy for Best Rock Video for ‘Royals.’ Lorde, have mercy. The New Zealand pop star... more

Property

House sales down as winter cools market - REINZ

14 Aug 2014 Property
New Zealand house sales fell in July as winter cooled the appetite of house hunters while a drop in properties selling for $400,000... more

NZ property values rise at slowest annual pace in 13 months

7 Aug 2014 Property By Paul McBeth
Aug. 7 (BusinessDesk) - New Zealand property values rose at the slowest annual pace in 13 months in July as rising interest rates,... more

Migration

Who's living next door to you?

20 Aug 2014 Migration
Statistics NZ puts out detailed data on different ethnic groups, down to the 108 people from the Isle of Man. Did you know there are... more

NZ population growth speeds up

14 Aug 2014 Migration
New Zealand's climb to 4.5 million people has been faster in the past year than it has in any other year in the past decade,... more

Travel

Jetstar loses ground in NZ as Qantas plunges to A$2.84B loss

28 Aug 2014 Travel & Tourism By Paul McBeth
Aug. 28 (BusinessDesk) - Jetstar, the discount unit of Australian airline Qantas Airways, lost ground in New Zealand, while claiming... more

Auckland 10th most liveable city - again

19 Aug 2014 Travel & Tourism
Auckland has again been ranked the tenth most liveable city in the world. The Economist Intelligence Unit (EIU) has released its... more

Sport

NZ Triathlon: Three Kiwi Aquathlon Golds in Edmonton

28 Aug 2014 Multisport
New Zealand has their Edmonton World Championship campaign underway with the perfect three from three gold medals in the elite... more

Dion Snell takes top prize at Auckland Rugby League Awards

28 Aug 2014 Sport
Howick Hornets second-rower Dion Snell has capped off a breakthrough year by being named 2014 Appliance Shed Fox Memorial Lion Red... more

Columns

Gordon Campbell on Peters’ latest bout of immigrant bashing

28 Aug 2014 Column By Gordon Campbell
  Gordon Campbell on Winston Peters’ latest bout of immigrant bashing, and Bob Dylan in the basement (again) So in the... more

NZ’s UN Security Council bid hangs by a nuclear thread

27 Aug 2014 Opinion By Bob Rigg
On 16 June the International Atomic Energy Agency (IAEA) in Vienna circulated a request backed by 18 members of the Arab League... more

Kiwi Success

The duo behind NZ's hottest new label

20 Aug 2014 People
We're expecting big things from Harman Grubisa, the new label from Auckland-based friends Madeleine Harman (right) and Jessica... more

Victoria announces new strategic appointments

11 Aug 2014 Appointments
Victoria University of Wellington has announced the appointment of New Zealand’s first Provost, Professor Neil... more

Recruitment

High dollar, hands-off Govt sends workers to dole queue

22 Aug 2014 Recruitment
The loss of up to 100 jobs at Croxley stationery in Auckland is devastating news for their families and the local Avondale... more

On track to surplus, more jobs, higher incomes

19 Aug 2014 Recruitment
New Zealand is on track to Budget surplus this year, backed by good growth, more jobs and higher incomes under the ... more