NZ dollar rises as investors flee Euro

Photo / Greg Bowker

The New Zealand dollar rose as investors fled the euro, with Greek and European Union officials meeting to discuss decisions made between private bondholders on how to lower the nation's borrowing costs.

The New Zealand dollar was trading at 62.47 euro cents at 8.30 a.m., up from 61.83 cents on Friday at 5pm. It was at 80.48 US cents, up from 80.13.

Investors are waiting to hear the final outcome of talks between Greece and private creditors, with progress reportedly starting to take shape over the weekend. Greece must strike a deal with bondholders to finance a 14.5 billion euro bond payment on March 20 or risk default, potentially triggering its exit from the euro.

Talks broke down between private creditors in Athens as Greek officials met to consult with European Union representatives, Bloomberg reported.

"Certainly as far as the kiwi goes, it is pain sailing," said Tim Kelleher, head of institutional FX sales at ASB Institutional.

"Today should be pretty quiet anyway, given it is Wellington Anniversary Day and half the market is closed."

Kelleher expects the kiwi to trade within the same range this week ahead of the Reserve Bank of New Zealand's review of monetary policy on Thursday, after the Consumer Price Index dropped an unexpected 0.3 per cent in the three months to Dec. 31 last week. The official cash rate is widely expected to remain unchanged at 2.5 per cent.

"There will be no rate change given the CPI figure last week - it will be a non event," Kelleher said.

There is no New Zealand data set for release today, with Wellington Anniversary Day.

In China the markets are closed till Wednesday for spring holidays.

The New Zealand dollar was trading at 76.93 Australian cents, down from 77.04 cents. It gained to 61.91 yen from 61.8. It was little changed to 51.73 British pence from 51.76 pence.

The trade-weighted index advance to 71.50 from 71.26.

- BUSINESSDESK