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Forex - NZD/USD falls after New Zealand trade balance report

Published 06/27/2012, 02:55 AM
Updated 06/27/2012, 02:55 AM

Investing.com - The New Zealand dollar was lower against its U.S. counterpart on Wednesday, after data showed that New Zealand’s trade surplus narrowed last month, while concerns that this week’s European summit will lead to no new measures to tackle the debt crisis weighed.

NZD/USD hit 0.7890 during late Asian trade, the daily low; the pair subsequently consolidated at 0.7893, falling 0.21%.

The pair was likely to find support at 0.7851, the low of June 21 and resistance at 0.7943, the high of June 19.

Official data showed earlier that New Zealand’s trade balance narrowed to NZD301 million in May, down from a revised NZD335 million the previous month, but slightly above expectations for a NZD300 million surplus.

The report also showed that the country’s annual trade deficit widened to NZD810 million from NZD790 million at the same time the previous year.

Meanwhile, markets remained jittery ahead of a European Union summit due to begin on Thursday, amid worries the talks will not result in any effective steps to strengthen fiscal integration and allow the euro zone’s rescue funds to buy government debt.

In Spain, the yield on 10-year government bonds was at 6.87%, nearing the critical 7% threshold, which is widely viewed as unsustainable in the long term.

Moody’s ratings agency downgraded 28 Spanish banks earlier in the week, after the country formally requested up to EUR100 billion to recapitalize its struggling banking sector.

In addition, Cyprus became this week the fifth euro zone country to request financial aid from the EU. The amount required was expected to be negotiated in the coming days.

Elsewhere, the kiwi was fractionally lower against the euro with EUR/NZD edging up 0.13%, to hit 1.5818.

Later in the day, the U.S. was to publish official data on durable goods orders, as well as industry data on pending home sales and a government report on crude oil stockpiles.


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