Forex - NZD/USD lower as market sentiment wanes

Published 05/07/2013, 02:59 AM
Updated 05/07/2013, 03:05 AM
NZD/USD
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AUD/NZD
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Investing.com - The New Zealand dollar was lower against its U.S. counterpart on Tuesday, as investors remained cautious following comments by European Central Bank President Mario Draghi.

NZD/USD hit 0.8486 during late Asian trade, the session low; the pair subsequently consolidated at 0.8486, shedding 0.32%.

The pair was likely to find support at 0.8482, the low of May 1 and resistance at 0.8556, Monday's high.

ECB President Draghi said the bank would monitor all euro zone economic data in the coming weeks and was ready to act if needed, suggesting that the bank could cut rates further in order to support the euro zone economy.

In a speech in Rome, Draghi said last week’s rate cut by the ECB was due to the economic slowdown in the euro zone affecting core economies and urged governments to make fiscal consolidation a priority.

In New Zealand, official data showed that the labor cost index rose 0.4% in the last quarter, less than the expected 0.5% increase, after a 0.5% gain in the fourth quarter.

The kiwi was higher against the Australian dollar with AUD/NZD losing 0.33%, to hit 1.2002.

Also Tuesday, the Reserve Bank of Australia lowered the benchmark interest rate to a record-low 2.75%, from 3% a month earlier. Analysts had expected the interest rate to remain unchanged.

Commenting on the decision, RBA Governor Glenn Stevens said policymakers "judged that a further decline in the cash rate was appropriate to encourage sustainable growth in the economy."

Later in the day, the Reserve Bank of New Zealand was to release its biannual financial stability report.


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