MONDAY last week saw the New Zealand Dollar trading at around 1.946 to the British Pound. Within two days it had reached a low of 1.964, however these losses had been reversed by Friday.
Tuesday’s losses in the currency were attributed to the European finance ministers’ failure to agree on a solid plan to minimize Greek debt. As usual, this resulted in investors shying away from risky assets like the Kiwi.
A 1.6% slide in imports by New Zealand’s fourth-biggest export destination, Japan, did not help bolster the currency. The number of New Zealand shipments to Japan declined a solid 5% from October 2011. Domestically, whole milk powder prices dropped to a seven-week low, as reported by the Fonterra Cooperative Group Ltd.
A climb in Asian stocks late last week boosted risky assets, pushing the Kiwi and Australian Dollars to seven-month highs against the Japanese Yen. HSBC Holdings’ Chinese Purchasing Managers Index rose to 50.4 in November, indicating an economic expansion.
“The PMI data will feed through to risk appetite and investor confidence, which is important for currencies such as the Australian and New Zealand dollars,” said Mike Jones of Bank of New Zealand.
For this week, investors will turn to Monday night’s meeting of Euro finance officials, the topic of which is how best to finance the EUR10 billion shortfall experienced by Greece.
Next week will see the central bank of New Zealand meet for a policy decision where the Governor Graeme Wheeler is expected to keep the rate unchanged at 2.5%.
Composed by Jesse Crooks for 1st Contact
Exchange rates as of 10:15, 26 November 2012
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