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Forex - NZD/USD pulls back from lows as sentiment recovers

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Forexpros - The New Zealand dollar was up against its U.S. counterpart on Thursday, rebounding from the daily low as risk aversion eased after France's top-tier credit rating was affirmed by the major rating agencies.

NZD/USD pulled back from 0.8073, the daily low, to hit 0.8175 during late Asian trade, gaining 0.78% on the day.

The pair was likely to find support at 0.7961, the low of August 9 and three-month low and resistance at 0.8415, Wednesday's high.

French President Nicolas Sarkozy met with Bank of France Governor Christian Noyer on Wednesday, as well as with a number of government ministers to discuss the country's economic and financial situation.

The meeting came amid mounting fears that France's top-tier AAA credit rating could be downgraded if the euro zone sovereign debt crisis worsened.

Shares in the three biggest French lenders, Societe Generale, BNP Paribas and Credit Agricole suffered heavy losses during Wednesday's trading session on the CAC 40 index in Paris, with SocGen plunging by as much as 23% at one point, underscoring concerns that the region's debt crisis could spill over to major banks across the single currency bloc.

Rating agencies Moody's, Standard & Poor's and Fitch's later reaffirmed France's top-tier AAA credit rating and said its outlook was stable.

Meanwhile, the Federal Reserve pledged on Tuesday to keep its benchmark interest rate at an all-time low, adding that it will maintain a loose monetary policy until "at least through mid-2013."

In a statement, the Fed said growth was much slower than expected and the labor market had deteriorated, underlining concerns over the U.S. economic outlook.

Later in the day, the U.S. was to release official data on its trade balance, as well as a government report on initial jobless claims and natural gas stockpiles.

The kiwi was also higher against its Australian cousin, with AUD/NZD shedding 0.15% to hit 1.2527.

Australian Bureau of Statistics said earlier that the country's unemployment rate rose unexpectedly to 5.1% in July from 4.9% in June, the first increase since October.

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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.

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