NZ dollar falls as G7 lacks crisis plan
Wed, 06 Jun 2012 9:08a.m.
The New Zealand dollar fell after the leaders of the Group of Seven nations came up with no action plan to counter Europe's deteriorating financial crisis.
The New Zealand dollar fell to 75.59 US cents at 8am from 75.82 cents on Tuesday at 5pm.
The trade-weighted index was unchanged at 69.15.
G7 leaders agreed to help Spain and Greece sort out their public finances following an emergency conference call on Tuesday, though no decisive steps were made to aid the indebted nations.
"G7 will come into the conversation today but the reality is they can do a lot of talking but it comes down to implementation," said Alex Sinton, senior dealer at ANZ New Zealand.
"There is no short term fix - until there is action nothing will change."
The kiwi dollar may be buoyed by a rebound in dairy prices in the latest GlobalDairyTrade auction.
"A solid overnight global dairy auction result should help to deliver more support for the New Zealand dollar on downside moves," Mr Sinton said.
The New Zealand dollar rose to 77.60 Australian cents from 77.47 cents on Tuesday, when the Reserve Bank of Australia cut its target cash rate by 25 basis points to 3.5 per cent.
The New Zealand dollar rose to 60.71 euro cents from 60.52 cents on Tuesday and increased to 59.53 yen from 59.40 yen.
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