Forexpros – The New Zealand dollar rose against its U.S. counterpart on Thursday, after the Reserve Bank of New Zealand left interest rates unchanged, while investors remained cautious ahead of an Italian bond auction later in the day and Greek elections on Sunday.

NZD/USD hit 0.7780 during late Asian trade, the daily high; the pair subsequently consolidated at 0.7762, climbing 0.52%.

The pair was likely to find support at 0.7687, the low of June 11 and resistance at 0.7825, the high of May 14.

In a widely expected move, the RBNZ held its benchmark interest rate at 2.50%, citing a deteriorating global economic outlook. The central bank also pushed back its forecast for when future rate hikes would start.

Following the decision, RBNZ Governor Alan Bollard told the New Zealand Parliament’s finance committee there’s a 10% chance that euro zone periphery countries will exit the bloc and that toxic Spanish and Italian debt will seep into European powerhouses France and Germany.

Sentiment remained vulnerable however, after Moody’s rating agency downgraded late Wednesday Spain’s credit rating by three notches, from A3 to Baa3, citing the nation’s increased debt burden, weakening economy and limited access to capital markets.

Meanwhile, Italy was preparing to sell up to EUR4.5 billion in long term bonds later in the day, amid growing fears the country will be the next euro zone member to require a bailout. Rome saw borrowing costs surge to the highest level since December at an auction of 12-month government bonds on Wednesday.

Markets were also jittery ahead of highly anticipated Greek elections on Sunday, which could determine the country’s future in the euro zone.

Elsewhere, the kiwi was higher against the euro with EUR/NZD shedding 0.31%, to hit 1.6186.

Later in the day, the U.S. was to produce official data on consumer price inflation and the country’s current account, as well as a government report on initial unemployment claims.