WSJ:New Zealand Dollar Down Late as Investors Sell in Favor of Euro
WELLINGTON--The New Zealand dollar is trading lower late Wednesday, as investors started shifting to the euro from the Kiwi.
"That is one of the crosses (NZD/EUR) that has outperformed over the last six months, so if people are thinking things are looking a bit more steady, not as bad, and that the ECB is prepared to act, then that's the cross that is most vulnerable," said ASB Head of FX Institutional Sales New Zealand Tim Kelleher.
The New Zealand dollar hit an all time high of EUR0.6681 on Aug. 3, but is now trading around EUR0.6555.
Bank of New Zealand currency strategist Mike Jones said in a note that the New Zealand dollar had been on the back foot overnight after Bloomberg reported that New Zealand Prime Minister John Key said the Reserve Bank of New Zealand has "room to move" and the high New Zealand dollar "takes pressure off the RBNZ."
Focus now turns to New Zealand and Australian employment data due Thursday. The median forecast in a Dow Jones Newswires poll of 11 economists showed the unemployment rate for the second quarter will likely be 6.5%, while employment is expected to rise by 0.4%.
Both the New Zealand government bond and the interest rate swap curves steepened following moves in Australian markets, a local bond trader said.
She added that bonds played catch up with moves in the swaps market during the session.
