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Forex - NZD/USD rises off 5-year lows but gains capped

Published 07/01/2015, 02:45 AM
Kiwi bounces back against greenback but upside seen limited
NZD/USD
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AUD/NZD
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Investing.com - The New Zealand dollar rose against its U.S. counterpart on Wednesday, pulling away from the previous session's five-year lows although gains were expected to remain limited as concerns over Greece's debt woes persisted.

NZD/USD hit 0.6811 during late Asian trade, the session high; the pair subsequently consolidated at 0.6806, climbing 0.61%.

The pair was likely to find support at 0.6744, Tuesday's low and a five-year low and resistance at 0.6881, the high of June 29.

The safe-haven greenback remained supported after Greece requested a new two-year bailout program on Tuesday, just hours ahead of a deadline for what looked to be an almost certain debt default by Athens.

The Greek government requested a new bailout from the European Stability Mechanism to cover the country’s financial need for the next two years, which would run alongside debt restructuring.

Greece’s existing bailout program officially expires at midnight and €1.6 billion loan repayment to the International Monetary Fund is due at the same time.

Without a rescue package in place Athens will almost certainly fall into arrears. Earlier in the day Greek Finance Minister Yanis Varoufakis said Athens would not make the deadline for the repayment.

Elsewhere, data on Wednesday showed that China's final HSBC Manufacturing Purchasing Managers' Index slipped to 49.4 last month from 49.6 in May, remaining in contraction territory for the third consecutive month.

China is New Zealand's second biggest export partner.

The kiwi was higher against the Australian dollar, with AUD/NZD dropping 0.47% to 1.1339.

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