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

Museum of Waitangi set to become a national and visitor Icon

5 Feb 2016 News
05 February 2016 Museum of Waitangi set to become a national and visitor Icon The new Museum of Waitangi, opened today by the... more

ETS Review modelling documents released

5 Feb 2016 Environment
5 February 2016 ETS Review modelling documents released Three technical documents are being released to help New Zealanders engage... more

Business

NZ wool prices slip on higher kiwi, reduced China demand

5 Feb 2016 Business News By Tina Morrison
Article - BusinessDesk   NZ wool prices slip on higher kiwi dollar, reduced demand from China By Tina Morrison Feb. 5 ... more

NZ directors more aware of risk, focus on cyber security

5 Feb 2016 Business News By Sophie Boot
Article - BusinessDesk   NZ directors more aware of risk, focus on cyber security   Feb. 5 (BusinessDesk) - Directors of... more

Living

Does what it means to be a Kiwi depend on where you live?

5 Feb 2016 Lifestyle
  4 February 2016What it is to be a Kiwi may depend of where you live – Auckland or elsewhere in New Zealand – with... more

2015: The Year of the Blockbuster

21 Jan 2016 Entertainment
Motion Pictures Distributors' Association   January 21, 2016 2015: The Year of the Blockbuster For the second year in a row the ... more

Property

Auckland house sales volumes jump to 8-year high in January

4 Feb 2016 Property By Tina Morrison
  Auckland's house sales volumes jump to 8-year high in January, Barfoot says Feb. 4 (BusinessDesk) - Auckland residential... more

Auckland house prices little changed in December

6 Jan 2016 Property By Sophie Boot
Article - BusinessDesk   Auckland house prices little changed in December as sales volumes, listings drop Jan. 6 (BusinessDesk)... more

Migration

More than 27,000 new Kiwis in 2015

5 Feb 2016 Migration
  This Waitangi Day, New Zealand will roll out the welcome mat to 24 new citizens at Government House, and acknowledge over... more

NZ net migrants reach all-time high 63,700 in boom November

21 Dec 2015 Migration
Article - Businesswire   NZ net migrants reach all-time high 63,700 in boom November year for travel By Jonathan Underhill Dec. ... more

Travel

More than 100,000 SmartGate users in one week

22 Jan 2016 Travel & Tourism
New Zealand Government Hon Nicky WagnerMinister of Customs 22 January 2016 More than 100,000 SmartGate users in one week Customs ... more

Wellington ratepayers to pay $8mln for Canberra flights

21 Jan 2016 Travel & Tourism By Pattrick Smellie
Wellington ratepayers to pay $8mln over 10 years for Canberra flights Jan. 21 (BusinessDesk) - Wellington City Council is... more

Sport

Global Racing Teams Attracted to Godzone’s Fifth Chapter

5 Feb 2016 Multisport
70 teams from 11 nations will come together in Kaiteriteri, Tasman this April for the fifth chapter of New Zealand’s premier ... more

Rob Nicol joins Mondiale Aces squad

22 Jan 2016 Cricket
Auckland Cricket Friday, 22 January 2016 Rob Nicol joins Mondiale Aces squad for Ford Trophy Qualifying Final The Mondiale Auckland... more

Columns

Gordon Campbell on Paula Bennett’s fantasy politics and Iran's election

22 Jan 2016 Opinion By Gordon Campbell
We seem to be living in an era of virtual government, where governments promote only an illusion of policy kapow! rather than the... more

Gordon Campbell on the Dotcom extradition decision

24 Dec 2015 Opinion
Column - Gordon Campbell   Gordon Campbell on the Dotcom extradition decision Inevitably – and with justification –... more

Kiwi Success

Appointment of GCSB Acting Director

5 Feb 2016 Appointments
New Zealand Government Hon Christopher Finlayson5 February 2016 GCSB Chief Legal Advisor Lisa Fong will become the Acting Director... more

Heading to Europe And the Olympics of Architecture

22 Jan 2016 Flying Kiwi*
Warren and Mahoney Heading to Europe And the Olympics of Architecture Architectural graduate Antonia Lapwood has been awarded the... more

Recruitment

Addressing skills shortages in dairy farming

11 Dec 2015 Recruitment
    11 December 2015 Minister for Tertiary Education, Skills and Employment Steven Joyce and Minister for Social... more

Alignment of NZ and Australian qualifications frameworks

4 Dec 2015 Recruitment
New Zealand Government Hon Steven Joyce Minister for Tertiary Education, Skills and Employment 4 December 2015 Tertiary Education,... more