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Forex - NZD/USD pares gains as risk aversion sharpens

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Forexpros - The New Zealand dollar pared gains against its U.S. counterpart on Monday, trading close to a seven-day low as concerns over global economic growth prospects weighed on demand for higher-yielding assets.

NZD/USD pulled back from 0.8233 during late Asian trade, a daily high; the pair subsequently consolidated at 0.8184, still up 0.04% on the day.

The pair was likely to find support at 0.8073, the low of August 11 and resistance at 0.8377, the high of August 18.

Concerns over the outlook for global economic growth as well as persistent worries about euro zone sovereign debt issues continued to weigh on risk appetite and bolstered demand for safe-haven assets.

German Chancellor Angela Merkel said in an interview over the weekend that the introduction of euro bonds was "not the answer" to solve the region's debt crisis.

Meanwhile, German Finance Minister Wolfgang Schaeuble said in a radio interview that the euro remained a stable currency, adding that markets still had confidence in the single currency.

Markets were also looking ahead to the Federal Reserve's annual policy retreat in Jackson Hole, Wyoming later in the week, at which Fed Chief Ben Bernanke could announce additional measures to support the U.S. economy.

Elsewhere, the kiwi was higher against the yen, with NZD/JPY climbing 0.22% to hit 62.77.

The ongoing strength of the yen prompted Japanese Finance Minister Yoshihiko Noda to sharpen his verbal warning to markets earlier, saying he will "watch markets even more closely than before to see whether there is any speculative activity."

Noda added that Japanese authorities "won't rule out any measures and will take decisive action when necessary", fuelling speculation the country was close to intervening to curb the yen's gains.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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