The New Zealand dollar advanced as investors sold the greenback on concern about political uncertainty in Greece and growth in China. Traders are also waiting for the release of Fonterra Cooperative Group's updated payout forecast.[
The kiwi rose to 77.15 US cents at 8am in Wellington, from 76.21 cents at 5pm yesterday. The trade-weighted index gained to 77.73 from 77.20 yesterday.
Greek stocks plunged after the government said voting for a new president will start next week, potentially opening the door to national elections that would likely be won by the Syriza party, which opposes Greece's bailout agreement with the European Union and International Monetary Fund. Meanwhile in China, investors are concerned the introduction of tighter lending rules may crimp worldwide economic growth.
"It's been a bit of a safe haven flight overnight," said Peter Cavanaugh, client advisor at Bancorp Treasury Services. "It's caused a rush into safe haven (assets) which is gold, government bonds and the yen and notably away from the US dollar so we have seen a sharp correction to the US dollar's very recent gains, particularly against the kiwi, the Aussie, the pound and the euro."
In New Zealand today, traders are awaiting an announcement from Fonterra, which is expected to lower its forecast payout to dairy farmers for the 2014/15 season. Housing data might also be released today.
