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

A democratic path forward to mandate a plan for #Brexit

26 Jun 2016 Opinion
Opinion - Alastair Thompson   A democratic path forward to mandate a proper plan for #Brexit - a proposal. By Alastair ... more

Minister to attend WW1 commemorations in Europe

24 Jun 2016 News
New Zealand Government Hon Anne Tolley Minister for Social Development 24 June 2016 Media Statement Minister to attend WW1... more

Business

NZ stocks turn as referendum result keeps investors guessing

24 Jun 2016 Business News
Article - BusinessDesk NZ stocks turn as UK referendum result keeps investors guessing By Paul McBeth June 24 (BusinessDesk) - New... more

NZ dollar drops vs. Australian dollar

7 Jun 2016 Business News By Johnathan Underhill
Article - BusinessDesk NZ dollar drops vs. Australian dollar on lack of RBA rate cut By Jonathan Underhill June 7 (BusinessDesk) -... more

Living

The Infinite Air: new book about Jean Batten celebrates NZ aviator's life

27 Jun 2016 Arts
** WIN one of two copies of the novel - visit our Competitions page for more details ** JEAN BATTEN was born in New Zealand in 1909,... more

INTERVIEW: NZ electronica pioneers Pitch Black in London

27 Jun 2016 Entertainment By Charlotte Everett
Pioneers of New Zealand's electronica scene, Pitch Black are celebrating the impending anniversary of their inaugural... more

Property

Record annual profit for Kiwi Property

16 May 2016 Property
By Jonathan Underhill May 16 (BusinessDesk) - Kiwi Property Group, the country's biggest listed property investor by market value,... more

Record annual profit for Kiwi Property

16 May 2016 Property
Portfolio gain, rental income growth delivers record annual profit for Kiwi Property By Jonathan Underhill May 16 (BusinessDesk) -... more

Migration

Kiwis could be affected by tighter UK rules

30 Mar 2016 Migration By Audrey Young
British High Commissioner Jonathan Sinclair is defending changes to skilled migrant rules for Britain but suggests they won't affect... more

Immigrants' attitudes to corruption worries SFO

17 Feb 2016 Migration By Sophie Boot
Feb. 17 (BusinessDesk) - New Zealand's record inbound migration has undermined the country's squeaky-clean reputation because of an... more

Travel

More funding for the New Zealand Cycle Trail

3 Jun 2016 Travel & Tourism
New Zealand Government   Rt Hon John Key Prime MinisterMinister of Tourism 3 June 2016 More funding for the New Zealand... more

Jucy plans to expand pod-style hotel chain to Australia

16 May 2016 NZ Tourism
Article - BusinessDesk Monday 16 May 2016 12:20 PM Jucy plans to expand pod-style hotel chain to Australia in 2017 By Fiona... more

Sport

Misfortune strikes All Blacks centre Moala

26 Jun 2016 Rugby By Daniel Gilhoolyd
more

Richie McCaw: 148

22 Jun 2016 Sport
Upstart Press   Richie McCaw: 148 148 tests 131 wins 110 times captain of the All Blacks 2 Rugby World Cup triumphs 12... more

Columns

Gordon Campbell on our refugee response, and a TPP rewrite

14 Jun 2016 Opinion
Column - Gordon Campbell   Gordon Campbell on our paltry refugee response and a brazen US rewrite of the TPP First published at... more

Gordon Campbell on Muhammad Ali

7 Jun 2016 Opinion By Gordon Campbell
As with Bob Dylan, Muhammad Ali changed the times in which he lived so thoroughly that anyone coming along afterwards will probably... more

Kiwi Success

New Ambassador to Belgium named

23 Jun 2016 Appointments
New Zealand Government Hon Murray McCully Minister of Foreign Affairs   23 June 2016 Media Statement New Ambassador to Belgium... more

New appointments to Vulnerable Children’s Board

12 May 2016 Appointments
New Zealand Government Hon Anne Tolley Minister for Social Development 12 May 2016 New appointments to Vulnerable Children’s... more

Recruitment

Zero-hour contracts gone, PPL extended

10 Mar 2016 Recruitment
New Zealand Government Hon Michael Woodhouse Minister for Workplace Relations and Safety 10 March 2016 Zero-hour contracts gone, PPL... more

Scheme helping to staff hard to fill positions

28 Feb 2016 Recruitment
New Zealand Government Scheme helping to staff hard to fill positions Health Minister Jonathan Coleman says an incentive scheme... more

s