Forex Pros – The New Zealand dollar was down against its U.S. counterpart on Monday, trading close to a five-month low, after the country’s prime minister reiterated his support for a cut in the benchmark interest rate.
NZD/USD hit 0.7366 during late Asian trade, the daily low; the pair subsequently consolidated at 0.7375, shedding 0.12%.
The pair was likely to find support at 0.7337, Friday’s low and a five-month low and resistance at 0.7472, last Thursday’s high.
On Sunday, New Zealand’s Treasury estimated the total cost of both Canterbury earthquakes at NZD15 billion, a figure the government’s economic agency said was “best described as a working assumption, rounded to the nearest NZD5 billion.â€
The Treasury also said the February 22 earthquake will reduce growth in economic activity by about 1.5% in 2011.
Earlier in the day, New Zealand’s Prime Minister John Key said that lower borrowing costs would be helpful to the country. Key said last week he would “welcome†a reduction in interest rates.
The kiwi was also lower against the euro, with EUR/NZD rising 0.14% to hit 1.8965.
Also Monday, official data showed that New Zealand’s home-building approvals rose in January by the most in almost two years, before last month’s earthquake derailed the economic recovery. Permits increased 9.6% from December, when they fell by 18.2%.
ForexPros.com
