Forexpros – The New Zealand dollar was higher against its U.S. counterpart on Wednesday, as investors were optimistic that this week’s European Union summit may result in convincing measures to tackle the region’s debt crisis.
NZD/USD hit 0.7826 during late Asian trade, the pair’s highest since December 5; the pair subsequently consolidated at 0.7815, gaining 0.22%.
The pair was likely to find support at 0.7722, the low of December 1 and resistance at 0.7927, the high of November 14.
Markets were hoping that European leaders will take decisive action to contain the region’s debt crisis at a summit later this week, following a first step in that direction by France and Germany earlier in the week.
On Monday, German Chancellor Angela Merkel and French President Nicolas Sarkozy outlined proposals aimed at allowing for greater fiscal integration and stricter enforcement of budgetary discipline in the single currency bloc, due to be discussed at this week’s summit.
Meanwhile, investors were also eyeing the European Central Bank’s policy decision on Thursday, as the central bank is seen likely to cut interest rates by 0.25% to 1%.
The kiwi was lower against the Australian dollar with AUD/NZD rising 0.15%, to hit 1.3154.
Also Wednesday, the Australian Bureau of Statistics said that gross domestic product grew by 1% from the second quarter, slightly below expectations for 1.2% expansion, but up 2.5% from a year earlier.
Later in the day, the Reserve Bank of New Zealand was to announce its benchmark interest rate. The U.S. was also to release government data on crude oil stockpiles.
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