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Forex - NZD/USD falls to 4-day low amid euro zone, Korea tensions

Published 11/23/2010, 05:26 AM
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Investing.com – New Zealand’s dollar was down against its U.S. counterpart on Tuesday, falling to hit a 4-day low as fears over sovereign debt contagion in the euro zone simmered and after North Korea shelled a South Korean island.

NZD/USD hit 0.7652 during European morning trade, the pair’s lowest since November 17; the pair subsequently consolidated at 0.7679, shedding 0.53%.

The pair was likely to find support at 0.7630, the low of November 17 and a 2-week low and resistance at 0.7835, Monday’s high.

On Monday, Irish Prime Minister Brian Cowan said that he would call a general election in the New Year after the Green party, the junior partner in the government, said it would withdraw its support from the increasingly unpopular minority coalition once the European Union/International Monetary Fund bailout package was in place.

The announcement stoked fears that the crisis which already engulfed Greece would spread to other indebted euro zone nations, such as Spain or Portugal.

Meanwhile, media outlets in Seoul reported early Tuesday that North Korean artillery fired dozens of shells onto a South Korean island near the disputed sea border, prompting a return of fire by the South.

Following the incident, South Korean President Lee Myung-bak called an emergency meeting of defense and security agencies and urged officials to "prevent further escalation".

The kiwi was also down against the euro, with EUR/NZD climbing 0.25% to hit 1.7699.

Later Tuesday, the U.S. was to publish revised figures on third quarter GDP as well as data on existing home sales and manufacturing. In addition, the Federal Reserve was to publish the minutes of its November monetary policy meeting.

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