Forex - NZD/USD edges higher, upside seen limited

Published 02/27/2013, 03:04 AM
Updated 02/27/2013, 03:05 AM
NZD/USD
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AUD/NZD
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Investing.com - The New Zealand dollar was higher against the U.S. dollar on Wednesday, but gains were limited as investors remained cautious after the Italian parliamentary election ended on a deadlock.

NZD/USD hit 0.8266 during late Asian trade, the session high; the pair subsequently consolidated at 0.8258, edging up 0.12%.

The pair was likely to find support at 0.8224, the low of February 26 and resistance at 0.8324, the high of January 4.

On Tuesday, the Italian election ended with no party or coalition in control of the Senate, raising the threat of a prolonged period of political instability and potentially reigniting the crisis in the euro zone.

Italian 10-bond yields rose to the highest level since December on Tuesday, climbing to 4.91% from 4.37% on Monday, while the yield on Spanish 10-year bonds rose to 5.5% from 5.1% on Monday.

Meanwhile, Federal Reserve Chairman Ben Bernanke defended the bank's easing program on Tuesday, saying that the benefits outweighed the possible costs. The comments came in testimony to the Senate on monetary policy.

The kiwi was also higher against the Australian dollar with AUD/NZD shedding 0.23%, to hit 1.2376.

Also Wednesday, official data showed that construction work done in Australia fell unexpectedly in the fourth quarter, ticking down 0.1% after a 1.9% increase in the previous quarter.

Analysts had expected construction work done to rise 1.5% in the last quarter.

Later in the day, the U.S. was to publish official data on durable goods orders and pending home sales, while Ben Bernanke was to testify on monetary policy for a second day. In addition, European Central Bank President Mario Draghi was to speak at an event in Germany.


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