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Forex - NZD/USD surges on hopes Europe crisis will ease

Published 05/27/2012, 10:32 PM
Updated 05/27/2012, 10:33 PM
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Investing.com - The New Zealand dollar surged against its U.S. counterpart on Monday on polls suggesting pro-bailout political parties are gaining ground in Greece.

Talk that Spain will ask the European Central Bank to help bail out its banking sector also boosted the currency.

NZD/USD hit 0.7626 in Asian trading on Monday, up 1.15% and up from a session low of 0.7577 and off from a high of 0.7630.

The pair sought to test support at 0.7515, the low of May 25, and resistance at 0.7696, the high of May 16.

In Greece, news that the New Democracy political party is gaining ground in the polls sent the euro and other higher-yielding currencies like the New Zealand dollar rising.

New Democracy is viewed as the most likely to favor sticking with the eurozone, and a strong showing in June 17 parliamentary elections could lead to a coalition government doing just that.

A messy exit from the eurozone could rattle global markets and cool global growth, which could bruise the New Zealand currency, which is often sensitive to global output swings.

Talk that Spain will ask the European Central Bank to help prop up its banking sector also boosted the currency.

New Zealand recently posted weaker-than-expected trade surplus figures, yet talk that Greece may avert disaster sent the currency soaring Monday, especially on sentiment the unit was oversold.

The New Zealand dollar, meanwhile, was up against the yen and up against its Australian counterpart, with NZD/JPY gaining 0.73% to 60.51 and AUD/NZD down 0.10% at 1.2932.

On Tuesday, New Zealand will release the latest data on building permits.






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