Late Change
NZD/USD 0.7917 +0.0083
NZD/AUD 0.7833 +0.0016
NZD/JPY 62.631 +0.806
April 2015 Bond 2.435% +7.5 bps
April 2023 Bond 3.455% +5.5 bps
10-Year U.S. Spread +177 bps unchanged
90-Day Bank Bill 2.62% unchanged
WELLINGTON--The New Zealand dollar is trading higher Monday after
Greece elected a pro-bailout party in Sunday's elections, easing fears
about an immediate rupture in the euro zone, although some gains have
been pared as investors continue to fret about the risks ahead.
"Markets are cheering the apparent victory of the pro-EU, pro-bailout
New Democracy party in the weekend's Greek elections. A New
Democracy-led Greek government is seen as more likely to keep Greece
in the EU for longer," Bank of New Zealand Currency Strategist Mike
Jones said in a note.
The conservative New Democracy party, which won the election by a slim
margin, has started informal talks with the Socialist party on forming
a new Greek government, officials from both parties said. A
cross-party coalition is likely to be formed by Wednesday.
The New Zealand dollar reached a high of US$0.7937 early in the day,
but has since pulled back slightly.
Chris Hunter, corporate dealing manager at Western Union Business
Solutions, said he anticipated any large upwards movements would be
capped in the near term, based purely on the fact that the election
result doesn't change Greece's economic situation nor the situation in
Spain nor elsewhere in Europe.
The focus for the market this week now turns to the Federal Reserve
meeting, in particular "given comments over the weekend from (Fed
Chairman Ben) Bernanke that the time for further easing could be
sooner rather than later, which is certainly a negative U.S. dollar
mover," Mr. Hunter said.
Locally, first-quarter balance of payments and gross domestic product
data are due later in the week, which may provide some direction for
the market. Offshore leads will remain dominant though.
New Zealand government bonds fell and interest rate swaps rallied as
the Greek election results saw investors move out of the safe-haven
assets, a local bond trader said.
Write to Lucy Craymer at lucy.craymer@wsj.com
(END) Dow Jones Newswires
June 18, 2012 01:05 ET (05:05 GMT)
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