Forex - NZD/USD slips but supported by rate expectations
Investing.com
Published Jul 25, 2011 03:32AM ET
NZD/USD hit 0.8617 during late Asian trade, the daily low; the pair subsequently consolidated at 0.8628, slipping 0.20%.
The pair was likely to find support at 0.8537, last Thursday’s low and short-term resistance at 0.8673, last Friday’s high and the pair’s highest since exchange rate controls ended in March 1985.
The U.S. Senate rejected a USD3 trillion deficit reduction plan on Friday, adding to fears over a potential downgrade or default ahead of the August 2 deadline to raise the country’s USD14.3 trillion debt ceiling.
Ongoing negotiations over the weekend failed to yield many signs of progress.
But the kiwi was supported by prospect of an interest rate hike by the RBNZ after data last week showed that inflation rate hit a 21-year high of 5.3% in the second quarter, driven by higher food and fuel prices and last year's rise in government sales tax.
Meanwhile, the kiwi was higher against its Australian cousin, with AUD/NZD shedding 0.26% to hit 1.2520.
Also Monday, ratings agency Moody's downgraded Greece by three notches to Ca from Caa1, after euro zone leaders announced a new aid package for the country worth EUR159 billion late last week.
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Written By: Investing.com
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