THE New Zealand Dollar opened on Monday at the 2.042 mark versus the British Pound following late afternoon trading on Friday when it had strengthened to the 2.009 region.
The Kiwi experienced a decline in early week trading as investors continued to sell off risky investments.
China announced a drop in its one year deposit rate, as well as its one year lending rate in a bid to bolster financial wellness.
Daisaku Ueno, foreign exchange strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo summed the move: “China eased monetary policy to support its economy, which is being taken favorably in markets.” This had a positive effect on emerging markets, with the Kiwi gaining for its fourth consecutive day against the
Japanese Yen. Omer Esiner, of Commonwealth Foreign Exchange, commented “The market has been so short over the last couple of weeks that it was pretty ripe for a snapback”.
Although the Chinese data was positive for the NZ Dollar, it did little more than temper further currency weakness. Investors remain skittish of risky assets, which is indicative that although risk-on sentiment may be the flavor of the day, it is in no way concrete yet.
With Spain’s outlook improving, after the receipt of a bailout loan from euro-region governments, the Euro may improve which could positively influencing New Zealand Dollar investors in the process.
Exchange rates as of 09h30, 11th June 2012
Composed by Jesse Crooks
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