Following the New Year boost to the respective strength of
the New Zealand and Australian dollars, they are now trading
flatly against the world's major currencies as the United
States addresses its looming debt ceiling crisis.
The transtasman currencies gained about US1c after Congress
voted down controversial ''fiscal cliff'' tax hikes on
January 1, but since then the currencies have been trading
flat or slightly down, BNZ currency strategist Mike Jones
said when contacted.
''The fiscal cliff jitters were assuaged with the deal on
January 1, with a wave of relief for the markets,'' he said.
That relief also carried the New Zealand and Australian
dollars and they ''screamed higher'' in strength by around
US1c, Mr Jones said.
Other analysts predict the kiwi could trade up to 84.7c this
week, following rising equity markets and Chinese commodity
demand, BusinessDesk reported yesterday.
Market scrutiny appears set to swing from the US to Europe
for the rest of the week, with the key economic event being a
European Central Bank meeting on Thursday, almost totally
focused on how far policymakers will go to boost growth,
Although there are some signs that a bottom may have been
reached in the eurozone's recent economic decline, the
pattern of moderate US and Asian growth book-ending feeble
Europe was firmly in place for the moment, Reuters said.
Yesterday, the kiwi was up slightly against the US at 83.05,
and was unchanged against the euro and Chinese yuan at
respectively 63.51c and 5.2, while the Australian dollar was
flat against the greenback at 104.75 and down slightly
against the euro and yuan, at respectively 80.0 and 6.5.
A year ago, the kiwi hit a then high against the euro, at
61.75c, sparking concerns at the time for exporters.
Mr Jones said following the ''initial optimism'' from January
1, the markets and investors ''had taken a reality check and
the [transtasman] currencies had drifted sideways''.
The ''key news'' being awaited now was a combination of the
US allowing itself to borrow beyond its almost $US17 billion
debt ceiling, and more fiscal cliff decisions in the months
ahead, he said.
Mr Jones noted that only part of the US ''fiscal cliff''
issue had been addressed, as decisions on wide-ranging cuts
to US public spending had only been postponed until March.
The economies of the US, China and much of the developing
world have decoupled from Europe, leaving it to wallow in
various stages of recession and fiscal disarray, Reuters
Manufacturing surveys published just a few days into 2013
laid out the divide starkly.
The US and China both came in above the 50 index level, which
designates growth, while the eurozone languished in
recessionary territory for the 17th month in a row.
The Australian dollar yesterday was a third of a US cent
higher after encouraging jobs data from the United States
pushed world markets higher. Yesterday morning, the
Australian dollar was trading at 104.72USc, up from 104.43 on
Westpac New Zealand senior market strategist Imre Speizer
told AAP the currency moved higher on Friday night, following
the release of US non-farm payrolls figures. The figures
showed 155,000 jobs were added to the US economy in December
and the unemployment rate was steady at 7.8%.
But Mr Speizer said concerns about an upcoming political
fight in the US over the country's debt ceiling and
speculation the Federal Reserve might end its stimulus
programme sooner than expected could weigh on the Australian