NZ dollar retreats as Spanish optimism fades, US stocks fall   12 Jun 2012

Hannah Lynch

The New Zealand dollar fell more than half a US cent as optimism over Spain's 100 billion euro lifeline faded after questions were raised about who is going to pay for the bailout, sapping investor confidence and pushing stocks on Wall Street lower.

The kiwi fell to 76.87 US cents at 8am from 77.65 cents yesterday at 5pm. The trade weighted index declined to 70.15 from 70.48.

Stocks on Wall Street fell as investors reassessed the plan to bailout Spain's banking system, with the Standard & Poor's 500 index dropping 1.3 percent to 1308.93. European policymakers are yet to clarify whether the loan granted to shore up Spain's banks will come from the region’s permanent support fund, the European Stability Mechanism or its temporary European Financial Stability Fund.

"Overnight we have seen various calls from Germany and Finland that the money should come from the European Stability Mechanism," said Stuart Ive, currency strategists at HiFX. "The New Zealand dollar is taking its lead from overseas and it means we are seeing a risk-off scenario - at the moment the kiwi has the potential to go as low as 76.20 US cents and there will be more risk towards the end of the week with the Greek elections."

Spain’s rescue comes a week before Greece’s second round of elections on June 17. The result will be closely watched by markets in the event voters deiced to elect a government that decides to leave the region’s shared currency.

The package has also moved Italy into the front line on concern it may be next to succumb to the debt crisis. The yield on Italian 10-year government bonds rose 27 basis points to 6.04 percent, the biggest daily rise since Dec. 8, according to Bloomberg.

Germany, the Netherlands, Austria and Italy will all sell government bonds this week. The Netherlands will sell up to 2.5 billion euros of 2033 bonds on Tuesday, while Germany is set to offer 5 billion euros of 2022 bonds on Wednesday.

New Zealand's accommodation survey for April and electronic card transactions for May are scheduled for release by Statistics New Zealand this morning.

The New Zealand dollar was little changed at 77.87 Australian cents from 77.81 yesterday. The kiwi rose to 61.56 euro cents from 61.45 cents and dropped to 49.64 British pence from 49.90 pence. It sank to 61.04 yen from 61.83 yen.

(BusinessDesk)

Add a comment

Bookmark and Share

News

Regeneration the focus of Christchurch governance

2 Jul 2015 Canterbury Earthquake
The regeneration of Christchurch will be the city’s focus for the next five years as local leadership progressively takes... more

Government Welcomes Successful WTO Trade Policy Review

2 Jul 2015 News
Government Welcomes Successful WTO Trade Policy Review Trade Minister Tim Groser today welcomed the conclusions of the 5th World... more

Business

TPP too big to fail, says visiting US trade deal specialist

2 Jul 2015 Business News By Fiona Rotherham
  TPP too big to fail, says visiting US trade deal specialist Petri July 2 (BusinessDesk) - Too much political capital has been... more

MARKET CLOSE: NZ shares gain, led by A2 as bidders named

24 Jun 2015 Business News
Article - BusinessDesk   MARKET CLOSE: NZ shares gain, led by A2 as potential bidder unmasked; dividends appeal By Jonathan ... more

Living

Remarkables ski area to kick off 2015 season this Saturday

24 Jun 2015 Lifestyle
The Remarkables June 24 2015 The Remarkables ski area to kick off 2015 season this Saturday The Remarkables ski area in Queenstown... more

SMCO-SOUNZ Composer Workshop selected works announced

23 Jun 2015 Lifestyle
SOUNZ For immediate release SMCO-SOUNZ Composer Workshop selected works announced SOUNZ and Auckland based St Matthews Chamber... more

Property

Extending Canterbury accommodation support

24 Jun 2015 Property
New Zealand Government Hon Anne Tolley Minister for Social Development 24 June 2015 Extending Canterbury accommodation... more

Arvida to buy three Auckland facilities for $62M

24 Jun 2015 Property
Article - BusinessDesk   Arvida to buy three Auckland facilities for $62M, raising new capital By Paul McBeth June 24 ... more

Migration

NZ migration rises to new annual record in May

22 Jun 2015 Migration By Suze Metherell
  NZ migration rises to new annual record in May, closing in on Treasury's upside scenario June 22 (BusinessDesk) - New Zealand... more

More visas online through Immigration ONLINE

16 Jun 2015 Migration
Immigration Minister Michael Woodhouse welcomes the roll out of online Work and Visitor visas as fantastic news for Immigration New ... more

Travel

Air NZ sees annual earnings rising by as much as 60%

24 Jun 2015 Travel & Tourism
Article - BusinessDesk   Air NZ sees annual earnings rising by as much as 60% By Paul McBeth June 24 (BusinessDesk) - Air New... more

Analysts divided on Jetstar impact on Air NZ's earnings

19 Jun 2015 Travel & Tourism
  Analysts divided on impact on Air NZ's earnings of Jetstar's regional routes challenge June 19 (BusinessDesk) - Analysts are... more

Sport

Wimbledon 2015: NZ Tennis players progress

2 Jul 2015 Sport
Kiwi Artem Sitak braves soaring temperatures and a lengthy battle to make it into the second round of doubles at Wimbledon.Kiwi Davis... more

Silver Ferns Netball World Cup team named

2 Jul 2015 Netball
Netball New Zealand (NNZ) National Selectors have picked a 12-strong Silver Ferns team featuring a mix of youth and experience to... more

Columns

Gordon Campbell on Tiwai Point, and saying “No” in Greece

2 Jul 2015 Opinion
Its hard to see how Rio Tinto’s one month delay in announcing its intentions about the Tiwai Point aluminium smelter is a good... more

Gordon Campbell on telling the poor to ask for more

24 Jun 2015 Column
Column - Gordon Campbell   Gordon Campbell on telling the poor to ask for more The government’s more

Kiwi Success

New Environment Protection Authority (EPA) board appointments

2 Jul 2015 Appointments
New Zealand Government Hon Dr Nick Smith Minister for the Environment New EPA board appointments Environment Minister Dr Nick Smith ... more

New Chair and Commissioners for Maori Language Commission

2 Jul 2015 Appointments
New Chair and Commissioners appointed to the Maori Language Commission The Maori Development Minister is pleased to announce that... more

Recruitment

Carpentry apprentices go head to head

23 Jun 2015 Recruitment
Apprentice of the Year Competition Carpentry apprentices go head to head in national competition Entries for the Registered Master ... more

NZ employees rate work-life balance as top priority

26 May 2015 Press Releases By Anna Lu
  NZ employees rate work-life balance as top priority, while job seekers eye cash, survey shows May 26 (BusinessDesk) - New... more