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Forex - NZD/USD hits 26-year high after Greece austerity vote

Published 06/30/2011, 02:56 AM
Updated 06/30/2011, 02:56 AM

Investing.com – The New Zealand dollar advanced to a 26-year high against its U.S. counterpart on Thursday, after Greece’s parliament accepted an austerity plan designed to avert a sovereign debt default, boosting demand for riskier assets.

NZD/USD hit 0.8318 during late Asian trade, the pair’s highest since exchange rate controls ended in March 1985; the pair subsequently consolidated at 0.8299, gaining 0.55%.

The pair was likely to find support at 0.8097, Wednesday’s low and resistance at 0.8400.

On Wednesday, the Greek parliament voted to accept the EUR28.4 billion, five-year austerity package needed to secure a EUR12 billion tranche of bailout funds from the European Union and International Monetary Fund.

There was to be a second vote later Thursday on the implementation of different parts of the package, such as tax rises and the sale of state assets.

The New Zealand dollar was also boosted after Reserve Bank of New Zealand Governor Alan Bollard said the country’s economy is being lifted by strong commodity prices, which are supporting currency demand.

“We expect the New Zealand economy to be driven by continued growth in our East Asia and Australian trading partners,” Bollard said. “High commodity prices have become an important engine of growth, but we expect price volatility will pose challenges for monetary policy.”

The kiwi was also higher against the yen, with NZD/JPY easing up 0.10% to hit 66.72.

Later in the day, the U.S. was to publish its weekly government report on initial jobless claims, as well as data on manufacturing activity in the Chicago region.

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