Investing.com - The New Zealand dollar edged lower against its U.S. counterpart on Tuesday, as market sentiment remained under pressure amid growing concerns over the rise of Spain’s borrowing costs ahead of a government debt auction later in the day.
NZD/USD hit 0.7912 during late Asian trade, the daily low; the pair subsequently consolidated at 0.7910, edging down 0.13%.
The pair was likely to find support at 0.7857, the low of May 8 and resistance at 0.8018, the high of May 4.
Investors remained cautious as the yield on Spanish 10-year bonds was at 7.16% on Tuesday morning, after surging to a euro-era high of 7.28% the previous day, amid concerns that a EUR100 billion bailout agreed earlier this month may not be enough to overhaul the country’s ailing banking system.
The 7% threshold is widely considered unsustainable in the long run and is the level at which Greece, Ireland and Portugal were forced to seek international bailouts.
Concerns that Spanish bond yields could continue to rise emerged as the country was preparing to issue EUR2 billion to EUR3 billion of 12- and 18-month debt later Tuesday and between EUR1 billion and EUR2 billion of bonds due in 2014, 2015 and 2017 on Thursday.
Meanwhile, investors were looking ahead to the conclusion of the Federal Reserve policy meeting on Wednesday, amid speculation over the possibility of a third round of easing from the central bank.
Elsewhere, the kiwi was steady against the Australian dollar with AUD/NZD rising 0.14%, to hit 1.2799.
Also Tuesday, the minutes of the Reserve bank of Australia’s June policy meeting showed that talks were dominated by the slower world economy and the debt crisis in the euro zone. The bank also indicated that further interest rate decisions will depend on developments in the single currency bloc.
Later in the day, the U.S. was to publish official reports on building permits and housing starts.
NZD/USD hit 0.7912 during late Asian trade, the daily low; the pair subsequently consolidated at 0.7910, edging down 0.13%.
The pair was likely to find support at 0.7857, the low of May 8 and resistance at 0.8018, the high of May 4.
Investors remained cautious as the yield on Spanish 10-year bonds was at 7.16% on Tuesday morning, after surging to a euro-era high of 7.28% the previous day, amid concerns that a EUR100 billion bailout agreed earlier this month may not be enough to overhaul the country’s ailing banking system.
The 7% threshold is widely considered unsustainable in the long run and is the level at which Greece, Ireland and Portugal were forced to seek international bailouts.
Concerns that Spanish bond yields could continue to rise emerged as the country was preparing to issue EUR2 billion to EUR3 billion of 12- and 18-month debt later Tuesday and between EUR1 billion and EUR2 billion of bonds due in 2014, 2015 and 2017 on Thursday.
Meanwhile, investors were looking ahead to the conclusion of the Federal Reserve policy meeting on Wednesday, amid speculation over the possibility of a third round of easing from the central bank.
Elsewhere, the kiwi was steady against the Australian dollar with AUD/NZD rising 0.14%, to hit 1.2799.
Also Tuesday, the minutes of the Reserve bank of Australia’s June policy meeting showed that talks were dominated by the slower world economy and the debt crisis in the euro zone. The bank also indicated that further interest rate decisions will depend on developments in the single currency bloc.
Later in the day, the U.S. was to publish official reports on building permits and housing starts.