NZ dollar gains as Greek talks with eurozone officials eyed
The New Zealand dollar gained, clawing back much of the ground lost in the wake of a stronger-than-expected US jobs report as traders eye developments in Europe, where Greece is backing away from the terms of its financial bailout.
The kiwi rose to 73.70 US cents as at 5pm in Wellington, from 73.37 at the start of the day and from 73.57 cents in New York on Friday. The local currency rose to 65 euro cents from 64.70 cents.
Greek Prime Minister Alexis Tsipras has been pushing back on the austerity measures his nation agreed to in exchange for a financial bailout after being swept into power by a population angry with widespread cuts to services and other budget constraints. Greek officials are scheduled to hold an emergency meeting with the eurozone's finance ministers on Wednesday and traders have speculated Tsipas will want to engineer a deal that gives his nation some respite without a default on its debt.
"The US dollar trend is still firmly up," said Martin Rudings, senior dealer at OMF. The kiwi dollar, though, has slipped down the "pecking order" of currencies to sell in order to buy the greenback, given the bounce back in the price of milk powder and the central bank's reminder to the market that it isn't planning to cut interest rates, he said.
Tsipras vowed in a speech to increase the minimum wage, restore the income tax-free threshold and halt infrastructure privatisations - a position that puts him on a collision course with Greece's creditors, Bloomberg reported.
The kiwi may trade between 71 US cents and 75 cents this week, according to a BusinessDesk survey of 10 currency traders, strategists and advisors. Four say the local currency will fall, three expect it to gain and three pick it to remain broadly unchanged.
The trade-weighted index rose to 76.46 from 76.42 last week. The kiwi weakened to 48.31 British pence from 48.40 pence on Friday, and advanced to 87.56 yen from 87.04 yen. It traded at 94.84 Australian cents, from 94.79 cents.