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Forex - NZD/USD tumbles as euro debt fears hit risk appetite

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Forex Pros - The New Zealand dollar tumbled to a two-day low against its U.S. counterpart on Monday, as fears about euro zone sovereign debt sapped investor demand for riskier assets.

NZD/USD hit 0.7876 during late Asian trade, the pair's lowest since May 19; the pair subsequently consolidated at 0.7887, tumbling 0.89%.

The pair was likely to find support at 0.7763, the low of May 17 and resistance at 0.7950, the day's high.

Market sentiment was hit after Fitch Ratings cut Greece's debt ratings by three notches on Friday, saying even a "soft" restructuring of the country's debt by European Union policy makers would be considered a default, while rival Standard & Poor's cut its outlook for Italy to negative from stable on Saturday.

Earlier Monday, a preliminary reading of the Markit/HSBC Chinese manufacturing purchasing managers index was 51.1 for May compared with a final reading of 51.8 in April.

A number above 50 indicates expansion in the sector. HSBC said the reading was the lowest in 10 months. China is New Zealand's second largest trading partner.

Meanwhile, the kiwi was fractionally higher against its Australian counterpart, with AUD/NZD dipping 0.03% to hit 1.3385.

On Sunday, Australia's Treasurer, Wayne Swan said the new managing director of the International Monetary Fund should be picked on "merit" and that the convention of selecting only Europeans for the post was outdated.

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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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