The New Zealand dollar rose against the euro to near the highest level since notes of the common currency were first issued in 2002, with signs the region’s leaders are far from finding a solution to the ballooning debt-crisis.
The New Zealand dollar traded at 61.39 euro cents just before 8am this morning, up from 61.05 cents at 5pm on Friday. The kiwi traded at 78.01 US cents, little changed from 78.12 cents on Friday.
German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet in Berlin tonight for the first time this year in an attempt to flesh out a new fiscal rulebook following the Dec. 9 leaders’ summit. The economic toll of the debt crisis is becoming more evident with Euro-zone retail trade falling 0.8 percent in November from October, data from the European Union’s statistics office Eurostar showed. A monthly poll by Reuters had forecast a 0.2 percent monthly fall.
“There has been continuous failure by the Euro nations to sort out their issues,” said Stuart Ive, senior currency strategist at HiFX. “In some form or the other the euro will fail – it is not going to be in the current form that it is in now.”
“The kiwi is going to remain dominated by the current (European) crisis,” said Ive. “The kiwi will track higher.”
In the US on Friday, economic data suggest recovery in the world’s largest economy is gaining momentum, with non-farm payrolls rising in December and the jobless rate dropping to a near three-year low of 8.5 percent, Reuters reported.
The kiwi rose to 76.35 Australian cents from 76.13 cents. It slipped to 59.86 yen from 60.28 yen and was at 50.56 British pence from 50.37 pence.
The trade-weighted index was up to 70.02 from 69.95.
(BusinessDesk)
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